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UNITED STATES 




OF AMERICA 



Congressional Tlecord 

PROCEEDINGS AND DEBATES OF THE 1 00 * CONGRESS 

SECOND SESSION 



VOLUME 134— PART 20 

OCTOBER 5, 1988 TO OCTOBER 7, 1988 
(PAGES 28285 TO 29660) 






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UNITED STATES GOVERNMENT PRINTING OFFICE, WASHINGTON, 1988 



For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 



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United States 
of America 



Congressional Hecord 

PROCEEDINGS AND DEBATES OF THE J 00 CONGRESS, SECOND SESSION 



SENATE— Wednesday, October 5, 1988 



The Senate met at 10 a.m., on the 
expiration of the recess, and was 
called to order by the Honorable John 
D. Rockefeller IV, a Senator from 
the State of West Virginia. 



PRAYER 

The Chaplain, the Reverend Rich- 
ard C. Halverson, D.D., offered the fol- 
lowing prayer: 

Let us pray: 

And God is able to make all grace 
abound toward you; that ye, always 
having all sufficiency in all things, 
may abound to every good work.— II 
Corinthians 9:8. 

God of infinite love and mercy, in 
these days of pressure, endemic in our 
political process at election time, make 
real to every Senator and all who 
labor under this tension the availabil- 
ity of the inexhaustable grace of God. 
Help us to ponder the superlatives, the 
infinite adequacy in this promise of 
grace. Help us to live in its light and 
its sufficiency for days like these. And 
help us to remember, loving Lord, that 
pressure turns stones into diamonds 
and irritation into pearls. 

In Jesus' name. Amen. 



(Legislative day of Monday, September 26, 1988) 

RECOGNITION OF THE 
MAJORITY LEADER 

The ACTING PRESIDENT pro tem- 
pore. Under the standing order, the 
majority leader is recognized. 

Mr. BYRD. Mr. President, I thank 
the Chair. 



APPOINTMENT OF ACTING 
PRESIDENT PRO TEMPORE 

The PRESIDING OFFICER. The 
clerk will please read a communication 
to the Senate from the President pro 
tempore [Mr. Stennis]. 

The assistant legislative clerk read 
the following letter: 

U.S. Senate, 
President pro tempore, 
Washington, DC, October 5, 1988. 
To the Senate: 

Under the provisions of rule I, section 3, 
of the Standing Rules of the Senate, I 
hereby appoint the Honorable John D. 
Rockefeller IV, a Senator from the State 
of West Virginia, to perform the duties of 
the Chair. 

John C. Stennis, 
President pro tempore. 

Mr. ROCKEFELLER thereupon as- 
sumed the chair as Acting President 
pro tempore. 



THE CHAPLAIN'S PRAYER 
Mr. BYRD. Mr. President, I thank 
the Chaplain for his great prayer in 
which he is telling us to keep the faith 
when times are turbulent, and the 
storms of political frenzy wail around 
us. 

Someone has said "I believe in the 
Sun, even when it is not shining; I be- 
lieve in love even when I am hated; I 
believe in God even when he is silent." 



A SOUTHERN GENTLEMAN AND 

GREAT SENATOR, JOHN C. 

STENNIS RETIRES 

Mr. BYRD. Mr. President, the de- 
parture of Senator John C. Stennis 
from this Chamber marks the end of 
an era. Since his arrival more than 4 
decades ago, nearly 300 persons have 
served in this Chamber and 8 different 
Presidents have occupied the White 
House. With his departure, an impor- 
tant segment of Senate history ends. 

On November 15, 1985, he became 
the' second longest-serving Senator in 
the history of the United States 
having served at that time, 38 years 
and 10 days. When he leaves the 
Senate on January 2, 1989, and the old 
Congress dies and the new Congress 
begins, he will have served 41 years 
and 2 months— just 8 months short of 
Senator Carl Hayden's all-time record. 

In 1982, he became 1 of just 11 Sena- 
tors in American history to be reelect- 
ed to office when over 80 years of 
age— a list that includes George Aiken, 
Alben Barkley, Carter Glass, Jennings 
Randolph, and our colleague, Strom 
Thurmond. 

Last June, nearly 1,000 people— in- 
cluding most of the U.S. Senate and 
President Reagan— honored our col- 



league in a celebration appropriately 
titled: "Celebration of a legend." 

Senator Stennis has been one of the 
most respected and most trusted Mem- 
bers of the U.S. Senate. His contribu- 
tions to the Senate and to the country 
over his long career are incalculable. 

This remarkable career of public 
service began six decades ago when, in 
1928, he was elected to the Mississippi 
House of Representatives. Three years 
later, in 1931, he was elected prosecu- 
tor for Mississippi's 16th Judicial Dis- 
trict and, in 1937, he became circuit 
judge— a position he held until his 
election to the Senate. 

In 1947, he came to the U.S. Senate, 
and an extraordinary career began. 

This career is a portrait of a multi- 
tude of accomplishments for his be- 
loved State of Mississippi. These in- 
clude a number of farm programs, the 
Tennessee-Tombigbee Waterway, the 
National Space Testing Laboratory, 
and the Navy ammunition plant. 
When Mississippians first sent Mr. 
Stennis to the U.S. Senate in 1947, 
they did so based on his pledge to 
"plow a straight furrow right down to 
the end of my row." They have been 
neither disappointed nor betrayed. 
"Think Mississippi," reads a sign on 
John Stennis' desk. 

On the national scene, Senator Sten- 
nis has also been a dominant figure in 
the U.S. Senate, an adviser to Presi- 
dents, and a man of enormous power 
and influence. His career has been 
marked by integrity, honesty, charac- 
ter, devotion, and leadership. 

During his career in the Senate, he 
has held leadership positions on two 
of the most powerful Senate commit- 
tees, Appropriations and Armed Serv- 
ices. 

Regarding his chairmanship of the 
Appropriations Committee, let me say 
that I only hope that his successor in 
that position does as well. 

Regarding national defense, Senator 
Stennis has always stood firm and re- 
fused to permit this great Nation to be 
second to any nation. Because of his 
work as chairman of the Senate Sub- 






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28285 



28286 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



committee on Preparedness, investi- 
gating of the Armed Services Commit- 
tee, in 1966, the Reserve Officers Asso- 
ciation presented Senator Stennis 
with its "Minuteman of the Year" 
award as the citizen who has contrib- 
uted most to national security. 

In this day and age, when waste, 
fraud and abuse run rampant in the 
Pentagon, we can recall the good old 
days— in this case, the days when Sen- 
ator Stennis served as one of the best 
and most effective chairmen of the 
Armed Services Committee in the his- 
tory of the Senate. During the 12 
years— 1969 to 1981— inclusive in 
which he held this position, more than 
50 new weapons systems were author- 
ized. Equally important, Senator Sten- 
nis never gave the Pentagon a blank 
check— he demanded close and careful 
scrutiny of every proposed defense 
outlay. "To support military readi- 
ness," Senator Stennis stated, "a Sen- 
ator does not have to be a wastrel." 

In 1974, along with Senators Jacob 
Javits and Thomas Eagleton, he au- 
thored the War Powers Resolution. 

Senator Stennis has consistently 
fought what he considered the exces- 
sive and gratuitous intrusions of the 
Federal Government upon the rights 
and privileges of the States and the 
American people. "Earning and doing 
for yourself rather than having gov- 
ernment do everything for you," he 
constantly charged long before Ronald 
Reagan took the White House, "is the 
American way." 

But he was not blinded by this ideol- 
ogy. He recognized and actively pro- 
moted the expansion of the creative 
abilities of the Federal Government in 
a number of areas including agricul- 
ture, medical research, forestry, small 
business, public works, and, especially, 
in industrial and rural development. 
He has been a strong supporter of 
health programs, of the REA, and 
TVA. He has been a consistent cham- 
pion of education at all levels. And, as 
a member of the Senate Space Com- 
mission, he played an important role 
in putting the United States ahead in 
the race to put a man on the Moon 
and in interplanetary competition. 

The senior Senator from Mississippi 
has brought to the U.S. Senate the ju- 
dicial skills and temperament acquired 
during a decade on the judicial 
bench— 1937-47. He has put those 
skills to effective use in this Chamber 
as time and again, from McCarthy to 
Watergate, this Chamber has called 
upon those particular talents. 

In this Chamber, Senator Stennis 
secured a justly deserved reputation 
for decency, unimpeachable integrity, 
and fairness. In recognition of his high 
ethical standards, in 1965, Senator 
Stennis was selected as the first chair- 
man of the Senate Committee on 
Standards and Conduct. In this posi- 
tion, he was instrumental in develop- 
ing the Senate Code of Ethics. 



Mr. President, I must confess that a 
tear as well as a chuckle came to my 
face when I read a description of him 
in the "Almanac of American Poli- 
tics," as being "a tough old bird." As 
most of us know, Senator Stennis' 
many accomplishments and experi- 
ences are dwarfed by the courage and 
strength of character that he has con- 
sistently demonstrated during his long 
and productive career in this Cham- 
ber. He has endured personal pain and 
hardships that most of us, we hope 
and pray, will be spared. Senator Sten- 
nis has not only endured them, but 
has risen above them in a way that is 
an inspiration to us all. 

In January 1973, Senator John C. 
Stennis was shot twice during a rob- 
bery in front of his house in North- 
west Washington. The bullets pene- 
trated several vital organs, and his 
condition was considered "grave." 
During those dark days in Senate his- 
tory, I recollect the words of one of his 
dear friends who assured the worried 
Members of this Chamber that, "John 
Stennis will make it because he is not 
yet prepared to leave the Senate." 

In November 1984, he lost one of his 
limbs to cancer. Barely a month later, 
however, he was back in this Chamber, 
performing his duties to his State and 
country. 

He also survived heart surgery, and a 
severe bout with pneumonia, and he 
endured the pain of losing his beloved 
wife, "Miss Coy." 

Mr. President, 6 years ago, on Sep- 
tember 28, 1982, a reporter for the 
Washington Post wrote: "It's hard to 
imagine the Senate without John C. 
Stennis or John C. Stennis without 
the Senate." Now, the U.S. Senate and 
the senior Senator from Mississippi 
face that reality. 

The retirement of this great Ameri- 
can brings to a close a major congres- 
sional career. The U.S. Senate is proud 
of Senator Stennis. 

We will miss his wisdom, his decen- 
cy, and the experience accumulated 
during more than four decades of serv- 
ice in this Chamber. 

I cannot and will not say goodbye to 
this dear friend and colleague— and he 
has been a dear friend and colleague 
for 30 years. He continues to be, and 
will continue to be, an inspiration to 
me. Therefore, I will just say: "Thank 
you. Thank you for serving your be- 
loved State. Thank you for serving our 
beloved country. And, personally, 
thank you for being my friend." 

My wife, Erma, and I wish him the 
best of health and happiness in his re- 
tirement. He has earned it, just as he 
has earned the love and gratitude of 
the people of this Nation. 

Mr. PROXMIRE. Mr. President, I 
congratulate the distinguished Demo- 
cratic leader for a truly great state- 
ment about a superb public figure, 
Senator Stennis. 



RESERVATION OF THE 
REPUBLICAN LEADER'S TIME 

Mr. BYRD. Mr. President, I ask 
unanimous consent that the time of 
the Republican leader be reserved. 

The ACTING PRESIDENT pro tem- 
pore. Without objection, it is so or- 
dered. 



MORNING BUSINESS 

The ACTING PRESIDENT pro tem- 
pore. Under the previous order, there 
will now be a period for the transac- 
tion of morning business, not to 
extend beyond 10:30 a.m., with Sena- 
tors permitted to speak therein for not 
to exceed 5 minutes each. 



HERE COMES THE BIG SURGE 
IN HEAVY CORPORATE DEBT 

Mr. PROXMIRE. Mr. President, 
anyone who believes that the enor- 
mous debt that plagues American busi- 
ness is not a serious threat to our 
economy is living in a dream world. At 
this very moment, business debt in 
America exceeds $4 trillion. But the 
real problem is that the growth of 
business debt in our country is just be- 
ginning. Doubt it? Consider the lead 
story in the Business section of the 
New York Times on Sunday, August 7. 
The Times article reports the huge in- 
crease in funds raised to engage in le- 
veraged buyouts. Anise Wallace writes: 
"Investors seem obsessed with the idea 
that stripping companies of their 
equity and leaving them with moun- 
tains of debt makes compelling invest- 
ment sense despite the maturity of the 
economic cycle." Mr. President, we are 
talking billions. Wallace argues that at 
least $25 billion is now targeted for le- 
veraged buyout investments. And be- 
cause of the 10-to-l leverage generally 
used in these deals, the $25 billion will 
bring acquisitions totaling $250 billion. 

Now, it is true that so far the lever- 
age buyout has worked like a happy 
dream. Investors have been making 
money hand over fist. They have en- 
joyed returns that are said to average 
20 to 25 percent annually. Frequently 
the returns exceed 100 percent. But 
Wallace points out these rolls of the 
dice have been coming in at exactly 
the right time. Interest rates, until re- 
cently, have generally been falling. 
Earnings have been rising. Stock 
prices have been on their way up. But, 
as Wallace notes in her New York 
Times article, this perfect environ- 
ment for leveraged buyouts no longer 
exists. If the economy slows down, and 
especially if it slides into a recession, 
many of the highly leveraged compa- 
nies would go bankrupt. 

Is this an exaggeration? Consider a 
recent computer simulation by two 
Princeton University scholars, Ben 
Vernanke and John Campbell. These 
scholars studied the debt growth of 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28287 



643 corporations on which there is de- 
tailed historical data from balance 
sheets and income statements. They 
concluded that a repetition of the 
1973-74 fall in total market value 
would lead to "unprecedented" debt 
asset ratios. For at least 10 percent of 
the firms, the simulated debt-asset 
ratios exceed unity, indicating bank- 
ruptcy. Mr. President, the bankruptcy 
of 10 percent of our corporations 
would slam this country into a depres- 
sion comparable with the 1930's. It 
would swiftly throw millions of Ameri- 
cans out of work. In view of the much 
greater international economic inter- 
dependency, the free world would 
suffer a cataclysmic disaster. 

Prof. Benjamin Friedman of Har- 
vard University commented on this 
Bernanke and Campbell study. Fried- 
man pointed out that the problem lies 
not simply with business solvency, but 
with liquidity. Friedman writes: 

Since 1980, it has taken more than fifty 
cents of every dollar of the average non- 
farm, non-financial corporation's pretax 
earnings just to pay its interest bill. That is 
a far cry from the 1950's and 1960's when in- 
terest payments took just sixteen cents of 
every dollar of earnings on average, or even 
the 1970's when interest payments took 
thirty-three cents on average. Corporations' 
interest coverage eroded further in both 

1986 and 1987 . . . the economic expansion 
that began in 1983 has been the only expan- 
sion since World War II to bring with it a 
rising, rather than falling, rate of business 
bankruptcies and debt defaults. 

Mr. President, is this leveraged 
buyout mania increasing even in the 
wake of the 1987 market crash? It cer- 
tainly is. It is true that in 1987 the Oc- 
tober crash temporarily slowed the 
pace slightly. Buyout deals, which had 
zoomed from $13.1 billion in 1985 to 
$41.7 billion in 1986, fell slightly in 

1987 to $39.3 billion. But the second 
quarter of 1988 was the biggest second 
quarter for leveraged buyouts in 
American history. With the above 
mentioned potential of $250 billion 
ready to explode into leveraged 
buyouts in coming months, hold on to 
your hats— the American economy is 
about to take a debt ride of a size and 
dimension it has never taken before. 

Mr. President, in a comment on the 
Vernanke-Campbell study, Prof. Law- 
rence Summers of Harvard University 
demurs. Summers contends that Fed- 
eral Reserve monetary policy can and 
will save corporate America from wide- 
spread corporate bankruptcies. Mone- 
tary policy can save borrowers from 
the burden of their debt presumably 
by keeping the interest rate and there- 
fore the interest burden low enough to 
keep most of the very heavily indebted 
corporations from insolvency. But 
Summers does see serious problems 
for thrifts and money center banks 
that hold much of the debt. Of course, 
one has to look no further than Texas 
today to see the warning red flag for 
America tomorrow. This Senator has 



far less faith in monetary policy to 
save corporations up to their eyeballs 
in debt than Professor Summers has. 
But Summers is right in his conclu- 
sions that our country's financial insti- 
tutions are likely to collapse first. 

Mr. President, I ask unanimous con- 
sent that the article to which I re- 
ferred, headlined "All Dressed Up and 
No Place To Go," by Anise C. Wallace 
in the August 7, 1988, New York 
Times, be printed in the Record. 

There being no objection, the article 
was ordered to be printed in the 
Record, as follows: 

[From the New York Times, Aug. 7, 1988] 

All Dressed Up and No Place To Go? 

(By Anise C. Wallace) 

At a time when many individual investors 
have fled the stock market in fear, one pack 
of investors is feverishly raising cash to buy 
up stocks. Leveraged buyout investors, who 
buy companies with borrowed capital and 
then resell them for hefty profits, are furi- 
ously piling up billions of dollars. 

Even the recent bankruptcy of Revco D. 
S. Inc.— one of the largest companies taken 
private in a leveraged buyout— seems not to 
have slowed the pace. Investors seem ob- 
sessed with the idea that stripping compa- 
nies of their equity and leaving them with 
mountains of debt makes compelling invest- 
ment sense despite the maturity of the eco- 
nomic cycle. 

"It's as if Oct. 19 never happened," said 
James C. Tappan, president of Tappan Cap- 
ital Partners and a former executive of Gen- 
eral Foods. 

Investment bankers, corporate executives 
and Wall Street firms have all jumped into 
the lucrative game staked out by such well- 
known firms as Kohlberg Kravis Roberts & 
Company and Forstmann Little & Compa- 
ny. In a leveraged buyout, known as an L. B. 
O., investors borrow huge sums of money to 
buy companies, hoping to pay off the debt 
with the companies' earnings and to profit 
richly by the later resale of the companies 
or their divisions. 

Almost 40 partnerships are currently 
trying to raise $8 billion to invest in lever- 
aged buyouts, according to Wilshire Associ- 
ates, a Santa Monica consulting firm that 
evaluates investments for pension funds. 
Last year, 42 firms raised a staggering $20 
billion, much of which has not yet been in- 
vested. KKR alone has capital commitments 
from its limited partners worth an estimat- 
ed $5 billion. There seems to be no public 
record of how many funds actually exist, 
but 40 is said to be only a portion of the 
total. 

Experts estimate that at least $25 billion 
is now targeted for making leveraged 
buyout investments. And because of the 10- 
to-1 leverage typically used in these deals— 
that is, for every $1,000 of purchase price, 
investors put up only $100 of their own 
money and borrow the rest — these invest- 
ment funds have the muscle to make acqui- 
sitions totaling $250 billion. 

Commercial banks are also allocating bil- 
lions of dollars to finance leveraged 
buyouts. In the past 12 months, banks have 
made 256 leveraged buyout-related loans to- 
taling $54 billion. The dollar volume of bank 
leveraged buyout loans in July jumped to 40 
percent of all commercial loans, up from 14 
percent one year earlier, said Christopher L. 
Snyder, Jr., president of the Loan Pricing 
Corporation, which monitors bank lending. 



Behind the frenetic race to raise funds, 
experts say, is the desire to tap into this 
gold mine in the final days of the lenient 
Reagan Administration, which has not tried 
to stop the huge deals of the 1980's. 
"There's an element of let's get this done 
today, because we may not get to tomor- 
row," said Mr. Tappan. Another executive 
characterized the activity as the "financial 
version of all-you-can-eat night." 

But how and where these leveraged 
buyout investors will invest the newly raised 
piles of cash remains to be seen. "Some- 
times you have to wonder if there are as 
many deals out there as there are people 
chasing deals," said Robert Zobel, invest- 
ment director of private placements at the 
Wisconsin Investment Board, which has 
$350 million invested in 13 leveraged buyout 
funds. 

This feverish capital raising and spending 
is causing some investors to worry that le- 
veraged buyout mania may be nearing a cre- 
scendo. "It's a feeding frenzy," said Douglas 
K. Le Bon, a vice president at Wilshire. "I'm 
seeing a lot of deals I don't like." 

In fact, despite the record sums of cash in 
search of these mulitbillion deals, the level 
of completed transactions had remained rel- 
atively flat since 1986, a rate of about $40 
billion a year. One important reason: the 
buyout funds are being outbid by large in- 
dustrial companies and international 
buyers. 

Barry Friedberg, managing director of 
Merrill Lynch Capital Markets, which just 
raised $1.5 billion for an leveraged buyout 
fund, said the emphasis may shift to smaller 
companies with diverse holdings that indus- 
trial buyers do not want, or to private com- 
panies that do not want to become part of 
an industrial giant. His fund recently 
bought two small private companies for 
$200 million each. 

Some predict that the pressure to spend 
the funds also could result in hostile deals, 
or other investments that depart from the 
leveraged buyout formula, such as KKR's 
purchase of 4.9 percent of Texaco's shares 
during the oil company's proxy battle last 
spring. 

"I think the game's going to be played a 
little bit more aggressively," said Robert 
Johnston, founder of Beaton Hill Financial 
Company, which helped seven leveraged 
buyout firms, including Forstmann Little & 
Company, raise more than $5 billion from, 
investors over the last five years. "The way 
you define friendly is being redefined." 

One thing is certain. The ever-expanding 
pool of capital is driving up prices for target 
companies, which will bring returns down 
from the stratospheric level of 50 to 100 per- 
cent average annual return of recent years. 
The average premium being paid for public- 
ly traded companies this year has increased 
to 36.7 percent over the market price one 
month prior to the leveraged buyout's an- 
nouncement, up from 29.2 percent in 1985, 
according to I.D.D. Information Services in 
New York. 

"When you get a lot of capital chasing a 
finite number of deals, you chase the prices 
up," said Robert S. Morris, senior vice presi- 
dent of the General Electric Company's in- 
vestment subsidiary, which manages G.E.'s 
$21 billion pension fund. 

For nearly everyone, the lure is the same; 
the huge sums of money being made in this 
arena. Advisory fees on leveraged buyout 
deals, for example, have totaled $158 million 
so far this year, according to I.D.D. They 
amounted to $301 million last year and $317 
million in 1986. 









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28288 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



But that is only a small part of the attrac- 
tion. On top of management and transac- 
tion fees, leveraged buyout firms also earn 
"the carry"— typically 20 percent of the 
profit made when a company is resold. Some 
early leveraged buyout partners, like Henry 
Kravis and Theodore Forstmann, are now 
among the wealthiest men in the United 
States. 

An additional lure for Wall Street firms 
trying to get into the leveraged buyout act 
is the potential to earn big investment bank- 
ing fees once these newly bought companies 
sell assets or go public again. Firms like 
Merrill Lynch & Company, Morgan Stanley 
& Company, Shearson Lehman Hutton Inc., 
Paine Webber Inc. and the Prudential- 
Bache Securities Corporation have all com- 
mitted their own capital— and have raised or 
are in the process of raising billion-dollar 
funds to invest in leveraged buyouts. 

In a leveraged buyout partnership, inves- 
tors typically pledge their capital for up to 
five to six years but do not actually transfer 
the money until the buyout fund makes an 
investment. The buyout firm earns a man- 
agement fee— usually at least 1 percent of 
the amount committed— during that period 
even when the fund makes no investments. 

Wall Street firms and leveraged buyout 
boutiques are not the only ones chasing this 
wave of debt financing. The commercial 
banks have jumped in with the same frenzy. 
Lured by loans that can earn bankers 
almost 3 percentage points more than other 
commercial loans, lenders such as Wells 
Fargo Bank, the Banker's Trust Company 
and the Manufacturer's Hanover Trust 
Company have committed billions of dollars 
in short-term bridge loans for these deals. 

But all this money has many people wor- 
ried. While critics of leveraged buyouts have 
predicted problems for years, the concern 
now is that the competitive pressure may 
cause inexperienced players to invest their 
newly raised funds unwisely, if only to dem- 
onstrate to their clients that they can do 
deals. They could buy lower quality compa- 
nies, or simply impose more debt than a 
company can handle and find themselves 
unable to make their debt payments, like 
Revco. 

Already, there are established investors 
that the influx of capital has pushed up 
prices, making it harder to invest clients' 
funds and generate returns greater than 20 
to 25 percent a year, which most of them 
have promised. Returns represent actual 
sales of properties as well as the upward re- 
valuation—on paper— of holdings not yet 
sold. 

"The world has gone crazy," said John G. 
Quigley, general partner at Adler & Shay- 
kin in New York. "We're seeing very, very 
high prices in large, medium and small com- 
panies." 

"The days of paying four to five times 
cash flow are behind us," said John S. Har- 
rison, a managing director of the First 
Boston Corporation. 

Investors point to two recent bids, Dura- 
cell Inc. and the Kendall Company, as ex- 
amples of the new competitive pricing. In 
the Duracell deal, KKR paid $1.8 billion to 
acquire the battery company from Kraft 
Inc. Several bankers said KKR's price 
topped the lowest bid by almost $500 mil- 
lion. Before the market became so crowded, 
such bidding disparities were rare. 

More recently, several investors said that 
they dropped out of the bidding for Ken- 
dall, a Colgate-Palmolive subsidiary which is 
for sale, when it became apparent that the 
likely price would prevent them from earn- 



ing the returns they have promised clients. 
One veteran leveraged buyout investor 
laughed out loud when asked about the deal 
and said he expected the company would 
sell for as much as 40 percent more than his 
targeted price. 

Executives say that investors in these 
deals are unlikely to lose money, but profits 
will probably be more limited. 

As a result of this increased competition, 
some of the established fund managers find 
themselves with huge commitments for cash 
and nowhere to place it. Mr. Quigley of 
Adler & Shaykin said that his firm has not 
completed a purchase since it bought 
Wherehouse Entertainment early this year. 
Nonetheless, his firm is in the process of 
raising an additional $500 million in capital. 
"We think in the years to come the lever- 
aged buyout business will continue to be a 
good business," he said. 

But with greater numbers of inexperi- 
enced investor and higher prices for deals, 
the odds are increasing that more of these 
transactions will run into trouble. Even in- 
vestors admit as much. "If, as I suspect, 
there is an economic downtown after the 
election, you're going to see a number of sit- 
uations similar to Revco," said Joseph L. 
Rice, president of Clayton & Dubilier Inc., 
which has $220 million available for lever- 
aged buyout investments. 

For the moment, however, interest re- 
mains high. Early investors, such as the 
Oregon State Employees Fund, the Wiscon- 
sin Investment Board and General Electric, 
which allocated hundreds of millions of dol- 
lars to buyout funds, have been joined by 
many others. 

In recent months, for example cash-rich 
Japanese institutions have begun directing 
some of their money to buyout funds and 
general investment firms that will do 
buyouts. The Nippon Life Insurance Com- 
pany, which owns 13 percent of Shearson, 
has committed several hundred million dol- 
lars to Shearson's leveraged buyout fund. 
The Nomura Securities Corporation placed 
$100 million with Wasserstein, Perella & 
Company, a new boutique investment bank- 
ing firm formed by executives who left First 
Boston. And the Yamaichi Securities Com- 
pany gave the same amount to the Lodestar 
Group, another new boutique. 

The growing role of the investment bank- 
ing firms concerns some pension executives 
who fear that the leveraged buyout funds 
have been set up— at least in part— to gener- 
ate investment banking fees. "Is their 
motive to earn a return for the partner, or is 
it revenue generation?" wondered one cor- 
porate executive. 

Investment bankers deny that the poten- 
tial conflicts will create problems. Since 
they are putting their own capital into 
these deals, they say, they are just as con- 
cerned with the return as their limited part- 
ners. 

"It's just as important to us that invest- 
ment banking services are well done," said 
Alan Altschuler, executive vice president of 
Prudential-Bache Securities, which has 
committed $800 million of its own capital to 
merchant banking, and which is said to be 
trying to raise more than $1 billion from in- 
stitutional investors. Still, he expects Pru- 
dential-Bache to perform many investment 
banking services for the fund's leveraged 
buyouts. 

The dangers of this frenetic deal-making 
could have more far-reaching consequences 
than just lower returns for investors. 

The biggest question for many of these 
companies is the health of the nation's 



economy. When leveraged buyout funds 
were racking up their stunning performance 
records, interest rates were falling, price/ 
earnings multiples were expanding and 
stock prices were rising. This perfect envi- 
ronment for leveraged buyouts no longer 
exists. 

The real danger, though, comes if the 
economy slows significantly or slides into re- 
cession. Then, many of these highly lever- 
aged companies could be tossed into bank- 
ruptcy, throwing workers out of jobs and 
slicing the value of the companies' publicly 
traded junk bonds held by mutual funds 
and savings institutions. The scenario could 
lead to a "general crisis of confidence," said 
Eric T. Miller, chief investment officer at 
Donaldson, Lufkin & Jenrette Securities 
Corporation. 

A recent computer simulation by the 
Brookings Institution found that a recession 
similar in strength to the one in 1973 and 
1974, would put one in 10 American compa- 
nies into bankruptcy. 

Obviously, the most highly leveraged com- 
panies will suffer the most. Because of their 
huge interest payments, they have little 
room for error in good times— and even less 
in bad times. An analysis by one Wall Street 
firm found that the majority of companies 
that financed their leveraged buyouts with 
junk bonds had debt-to-equity ratios higher 
than Revco's 512 percent. Revco, which was 
unable to meet its interest payments, filed 
for Chapter 11 bankruptcy protection last 
month. The average debt-to-equity ratio of 
the largest 300 industrial companies is 65 
percent.) 

Another downturn in the stock market 
could also present problems for the lever- 
aged buyout funds by making it difficult to 
sell off the companies— or even divisions. 
Because of the way some leveraged buyouts 
are structured, many must begin selling 
assets within 90 days of the deal's comple- 
tion to avoid interest costs that can be "pro- 
hibitive," said Mr. Snyder of Loan Pricing. 

Junk bond investors are also adding to the 
pressures on leveraged buyout funds. They 
have bought almost $37 billion of the high- 
yield securities issued to finance leveraged 
buyouts, and they are not proving sympa- 
thetic when leveraged buyouts miss debt 
payments. 

Revco, of course, is the most recent exam- 
ple. Although Bondholders formed a com- 
mittee to work with the company when the 
drugstore chain began to stumble last fall, 
one junk bond fund manager, Magten Asset 
Management, later stopped negotiations 
when the company missed interest pay- 
ments on its debt, which forced the compa- 
ny into bankruptcy. 

"If companies don't pay their interest, 
we'll force them into bankruptcy," said 
Richard Swingle, vice president at T. Rowe 
Price Associates in Baltimore and president 
of the new Institutional Bondholders 
Rights Association. "We're not sitting here 
holding these bonds because we're good 
guys. We want a rate of return." 

In fact, some investors believe the greatest 
investment returns in the future will be 
available from picking through the debris 
left by the wave of expected leveraged 
buyout bankruptcies. "I think returns are 
going to be very significant," said Francine 
Sommer, an independent investor who most 
recently was president of Gabelli Value Inc. 
"I think it's the next exciting area." 

The buyout funds have entered a difficult 
era. With their newly raised capital, the un- 
certain economic environment and the in- 
creased competition, the days of huge, fast 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28289 



profits are clearly behind them. Investing 
the capital in new deals, said Mr. Priedberg 
of Merrill Lynch, is "going to be a bigger 
challenge." 



AIR TRANSPORTATION 

Mr. FORD. Mr. President, it is no 
exaggeration to say that safe, effi- 
cient, reliable air transportation is es- 
sential to the Nation's continued eco- 
nomic growth. More than 450 million 
passengers will fly in U.S. scheduled 
service during 1988 and nearly 800 mil- 
lion passengers annually are projected 
within the next few years. 

As I have said before here on the 
Senate floor, I have been exposed to 
every conceivable problem that exists 
with this Nation's airport and airway 
system. During the past 2 years many 
of us have grown increasingly frustrat- 
ed about our inability to solve national 
aviation problems. 

During that time, a lot of Senate 
support has come about for S. 1600, 
which is now cosponsored by a majori- 
ty of the Members of the Senate. 
There is no question that enactment 
of this legislation, which fundamental- 
ly restructures the Federal Aviation 
Administration, is an essential step 
toward revitalizing and streamlining 
the Agency to adapt it to our rapidly 
changing aviation system. 

Virtually everybody knows the cur- 
rent structure and operating environ- 
ment of the FAA is one of the basic 
problems we have to fix. There is vir- 
tually no leadership stability or conti- 
nuity at the Agency. In the past 5 
years there have been three FAA Ad- 
ministrators. We also know vital air- 
port and airway safety and capacity 
projects are consistently underfunded 
because of budgetary constraints and 
that the FAA must abide by outdated 
civil service regulations which hamper 
its ability to fill key positions in the 
controller work force. I do not even 
have to describe the restrictive and in- 
efficient procurement regulations the 
FAA must live with. 

We have worked hard on this legisla- 
tion which provides a good start 
toward dealing with many of these 
problems. The sooner we restructure 
the FAA so that its leadership, fund- 
ing, personnel, and procurement prob- 
lems can be solved and the Agency run 
more efficiently, the better. 

I am disappointed that we will not 
enact this important legislation prior 
to adjournment. I have talked to nu- 
merous Senators who are cosponsors 
of S. 1600 and assured them that it is 
my intention to reintroduce this bill 
early next year. As far as I am con- 
cerned, it must be a top priority for 
our aviation agenda when we return 
and I am committed to giving it the 
urgent attention it deserves. I am 
pleased to report that many of my col- 
leagues feel the same way, and we will 
be working together to get the job 
done next year. 



FAA RESTRUCTURING 

Mr. STEVENS. Mr. President, 
during the past 2 years many of us 
have expressed concern about our 
aviation industry and our national air 
transportation system. The rapid 
growth in air travel following deregu- 
lation has crafted an enormous prob- 
lem. Our aviation infrastructure is in- 
adequate to accommodate the de- 
mands being placed on it and the Fed- 
eral Aviation Administration is ill- 
equipped to do its job. 

This year in the Senate a majority 
of our colleagues cosponsored S. 1600, 
a bill that promises to provide solu- 
tions to some of our long-standing 
aviation problems. Unfortunately, this 
legislation will not be enacted this 
year. 

We must provide FAA management 
the necessary flexibility to deal with 
its unique problems. I am thoroughly 
familiar with the problem FAA has in 
dealing with procurement regulation 
and personnel rules that are outdated. 
It is vital that we simplify the procure- 
ment process and correct deficiencies 
in personnel management practices. 
Most importantly, we must address 
the questions related to funding and 
insure that the FAA has access to an 
adequate level of guaranteed funding 
in the coming year. 

I look forward to working with Sena- 
tor Kassebaum, Senator Ford, mem- 
bers of the Commerce Committee and 
other interested Senators in getting 
FAA reform legislation moving as soon 
as possible next year. 



CAMPAIGN ISSUES 

Mr. BUMPERS. Mr. President, yes- 
terday, I discussed what I thought 
were some of the real issues in the 
campaign and how they were not 
really being addressed. I will deliver 
these little talks from time to time, 
but one deals with education. 

I want to point out that virtually 
every year for the past 8 years, there 
has been an assault by this administra- 
tion on student loans and Pell grants. 
I think that anybody who watched the 
Barbara Walters show the night 
before last, styled "Our Children: Why 
Are They Flunking?" will take a very 
dim view of what has happened to 
education in this country in the past 8 
years. 

The other point I want to make is 
that we were talking about the deficit 
that has been accumulated in the past 
8 years— almost $1.6 trillion. Bear in 
mind that when President Reagan 
came to office, the national debt 
which had accumulated in the preced- 
ing 200 years was less than $1 trillion. 
And in 8 years this administration has 
added $1.6 trillion more debt to that. 
As a matter of fact, every morning the 
first obligation of the Treasury is to 
print $575 million in hot checks just to 
pay the interest on the national debt 



to keep this Government going that 
day. People say you cannot make an 
issue out of that, people cannot relate 
to $2.6 trillion. They do not know how 
much money that is. 

I want to say this: I will never forget 
the campaign in 1980 when there were 
calls on the floor of the U.S. Senate 
for Jimmy Carter's impeachment be- 
cause they thought the deficit was 
going to be $35 billion that year then 
you saw President Reagan in New Or- 
leans say "Why would you blame me 
for this deficit? You know that I do 
not spend the money; only Congress 
can appropriate money." 

That is true, and the American 
people ought to be grateful for that 
because we have appropriated $20-$50 
billion less in the past 8 years than 
President Reagan has requested to ap- 
propriate. 

In short, if he had had his way, the 
deficit today would be more than $2.6 
trillion. 

Now the real point that I want to 
make, and I do not want to take any 
more of my distinguished Senator's 
time, is did you ever hear Ronald 
Reagan in 1980 say: "Jimmy Carter is 
not responsible for this deficit, only 
Congress can appropriate money; I am 
running for President against a Presi- 
dent Carter, but I am certainly not 
going to blame him for the deficit be- 
cause we all know that only Congress 
can appropriate money?"Did anybody 
hear that? Why, of course you did not. 
All you heard was deficit, deficit, defi- 
cit. "I will balance the budget by 1984, 
maybe by 1983." I remember that Sep- 
tember evening when he looked into 
the lens of the camera— I was sitting 
in my living room— and Ronald 
Reagan said, "Jimmy Carter, if you 
can't balance the budget, move over 
and let me in because I can." 

What do we have? An additional $1.6 
trillion in debt, nearly twice as much 
as that incurred by all the preceding 
Presidents of the United States. I just 
wanted to make that record. 

I thank my distinguished colleague. 

Mr. BYRD. Mr. President, will the 
Senator yield? 

Mr. BUMPERS. I am happy to yield. 

Mr. BYRD. Mr. President, I did not 
hear all of the distinguished Senator's 
remarks, but I was very interested by 
what I did hear. 

I think it is about time that the 
American people are told the facts as 
they have been laid out by Senator 
Bumpers. He spoke of the fact that 39 
administrations over a period of 192 
years had accumulated a debt of 
barely under $1 trillion, about $998 or 
$999 billion. 

And then he said that during these 8 
years that debt has grown to more 
than $2.5 trillion. In other words, he 
said it increased 160 percent, over $1.5 
trillion in 8 years. And he pointed out 
that the interest on the national debt 












28290 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



is $150, did the Senator say, or $151 
billion? $151 billion this year. 

Mr. BUMPERS. It is the deficit. 

Mr. BYRD. Yes. 

My granddaughter was over at my 
house recently. I said, "How much is a 
trillion dollars? How long would it 
take to count a trillion dollars at the 
rate of $1 per second?" 

So we figured out, using the old 
math which is still good for me, and it 
would take 32,000 years to count a tril- 
lion dollars at a rate of $1 per second. 

Now to count $2.5 trillion then it 
would require 80,000 years. We hear a 
lot about taxes, and the Senator spoke 
about the interest on this national 
debt, $150 billion a year. That is the 
most invidious tax of all. 

Mr. President, it does not buy any 
national defense; it does not buy any 
health services; it does not buy any 
education; it does not buy any re- 
search. And mind you, much of that 
interest that the American taxpayer is 
paying on that national debt is going 
to foreigners, foreigners who are 
buying up our financial paper. That is 
the most invidious tax that is laid 
upon the taxpayer. 

Now the administration is going to 
get out of town. We have had our 
borrow and spend spill, the borrow 
and spend binge, and now before the 
waitress brings the check for this 
borrow and spend banquet, they are 
going to get out of town, but the next 
President, be he Republican or Demo- 
crat, is going to be faced with that 
massive burden of over $2.5 trillion. 

Mr. President, I thank the distin- 
guished Senator from Arkansas for 
laying out the facts. These are the 
things that the American people need 
to be reminded of. 

Mr. BUMPERS. If the Senator will 
indulge me just a few additional sec- 
onds, when the Senator says that the 
interest on the debt this year is going 
to be $151 billion that is the net inter- 
est, that does not count the interest 
income that we bring in. Actually, the 
gross interest on the debt this year is 
going to be over $200 billion. 

If nobody remembers anything else I 
say I wish they would remember this: 
This year the deficit is going to be 
about $150 billion, $135 billion out of 
this year's deficit of $150 billion will 
be to pay the interest just on the debt 
that this administration has accumu- 
lated in the past 8 years. 

I yield the floor. 

Mr. BYRD. And the Senator pointed 
out in this statement that the increase 
in that national debt was 60 percent, 
that under this administration the na- 
tional debt has increased 60 percent. 

Mr. BUMPERS. More than that- 
over 150 percent. 

Mr. BYRD. It is 150 percent, that is 
right. So what I am really saying is 
that 60 percent of the total debt was 
added by this administration. 

Mr. BUMPERS. That is right. 



Mr. BYRD. Which means that of 
$150 billion in interest we are paying 
60 percent of that or $90 billion of 
that interest is the result of the 
borrow-and-spend banquet that this 
administration and we have had in 
these last 8 years, and in all that time 
the President who promised to balance 
that budget as the Senator said in 
1984 or 1983 

Mr. BUMPERS. He said he might do 
it in 1983. 

Mr. BYRD. Might even do it in 1982. 

Mr. BUMPERS. Yes, I believe that is 
correct. 

Mr. BYRD. And he has never yet 
sent to the Congress a balanced 
budget. 

Mr. BUMPERS. Does the Senator 
remember when President Reagan, 
then candidate Reagan, was going 
around the country and saying, "let's 
cut your taxes 30 percent;" at that 
time the Kemp-Roth tax bill was a 30- 
percent cut. He said, "I am going to 
cut your taxes by 30 percent, double 
the defense budget and balance the 
budget." 

An old 84-year-old Democrat down in 
Arkansas said, "What a dynamite idea. 
I wonder why anybody hadn't thought 
of that before." 

One point six trillion dollars later we 
know why nobody ever thought of 
that before. 

So, Mr. President, I just want to 
make that point plus one more about 
the tax cut of 1981. I think it was the 
proudest moment of my life when I 
was one of 11 U.S. Senators who voted 
against that tax cut. And you know 
how much mail I got over that vote? It 
was not the most popular thing I had 
ever done, but I tell you I want put on 
my tombstone a speech I made about 
an hour before we voted sitting at this 
very desk when I said, "If you pass 
this tax bill, you are going to create 
deficits big enough to choke a mule." 
Those were my exact words. 

Now, nobody likes to hear anybody 
say, "I told you so." And most of us 
cannot resist saying, "I told you so." 

But let me just give you some idea of 
how prophetic that was. First, I might 
point out here that some responsible 
Senators from that side of the aisle, 
and I am tempted to name their 
names, but some responsible Senators 
from that side of the aisle in 1982 saw 
an apocalypse coming and they went 
to the White House, under the leader- 
ship of Howard Baker, then majority 
leader, and they said— and I was not 
privy to the conversation, but I can 
just hear it— "Mr. President, we have 
overdone this thing. We are going to 
have deficits that the American people 
will not tolerate. We have to do some- 
thing about it; namely, raise taxes." 

And since then, of course, we raised 
taxes a little bit almost every year to 
stem the revenue drain from the 1981 
tax cut. 



But the tax cut of 1981, the tax cut 
of 1981 cost the Treasury in 1988, this 
year we just finished, $260.8 billion. 
You can look that figure up in the 
President's own budget at page 4-4. 
This is his estimate of the revenue 
loss, not mine. 

I am saying that tax cut, in isolation, 
left alone, cost the Treasury $260.8 bil- 
lion, this year also. 

My point is this: we could have cut 
taxes by 10 percent instead of 25 per- 
cent then, we would now have a hot 
economy and a balanced budget this 
year. But, no. As Franklin Roosevelt 
said, "The fat pocketbooks of the rich 
groan louder than the empty bellies of 
the hungry." 

I yield the floor. 



EXTENSION OF MORNING 
BUSINESS 

Mr. BYRD. Mr. President, I ask 
unanimous consent that morning busi- 
ness be extended for 5 minutes. 

The ACTING PRESIDENT pro tem- 
pore. Without objection, it is so or- 
dered. 

Mr. REID addressed the Chair. 

The ACTING PRESIDENT pro tem- 
pore. The Senator from Nevada. 



THE DEPARTMENT OF ENERGY 
AND THE ENVIRONMENT 

Mr. REID. Mr. President, on August 
10, my good friend Congressman Mel 
Levine of California, and I, inducted 
the Department of Energy into the 
"Environmental Hall of Shame." The 
Department of Energy received the 
first Globe Rotter Award for an action 
which demonstrates "a callous disre- 
gard for the environment and the 
quality of life." 

The DOE, manager of our Nation's 
nuclear weapons program, received the 
Globe Rotter Award for plutonium 
leaks at the radioactive waste site at 
the National Engineering Laboratory 
in Idaho Falls, ID. Tests indicate that 
radioactive waste has been found 240 
feet below the surface, almost halfway 
to an underground water reservoir. 
Disregard for protective environmen- 
tal practices resulted in DOE pumping 
hazardous waste into the Snake River 
aquifer, potentially contaminating the 
river and its arteries. The problems 
Congressman Levine and I outlined at 
the Idaho facility are just the tip of 
the iceberg. Estimates indicate that 
clean up of hazardous waste problems 
at DOE's defense-related facilities 
could cost $100 billion. 

We were asked "Why the Depart- 
ment of Energy?" Some questioners 
chalked the award up to sour grapes 
because of DOE's activities surround- 
ing the proposed high-level nuclear 
waste repository at Yucca Mountain, 
NE. Not so. There were many contend- 
ers for the first Globe Rotter Award. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28291 



Because of arrogance and inability to 
comply with the environmental stand- 
ards that others are required to follow, 
various activities of other Federal 
agencies have contributed to the deg- 
radation of the environment. But, 
there is no question the Department 
of Energy deserved the first "Globe 
Rotter" Award for its activities in 
Idaho. Again, time has proven us cor- 
rect. DOE's lack of public accountabil- 
ity and apparent disregard for public 
health and safety will haunt us all for 
years to come. 

DOE's recent revelation surrounding 
its failure to disclose a number of seri- 
ous reactor accidents that occurred at 
the agency's Savannah River plant in 
South Carolina should give us pause. 
Recent testimony before Congress 
refers to "30 reactor incidents of great- 
est significance" from 1957 to 1985, 
that had not been acted upon— nor 
been brought to the attention of the 
public. That is 30 separate incidents. 

The accidents, summarized recently 
in a New York Times article: 

Occurred at five reactors that form the 
core of the operation at the Savannah River 
plant, which employes 16,700 people and ac- 
counts for 21 percent of the $7.75 billion 
DOE intends to spend next year on weapon 
programs. 

Among the accidents that occurred at the 
reactors were a number of unexplained 
power surges that threatened to go out of 
control. In one incident on January 12, 1960, 
the reactor increased in power more than 10 
times faster than was considered safe. 

In another accident in November 1970, a 
radioactive rod that was a source of neu- 
trons to start the atomic chain reaction in 
one reactor melted. A processing room adja- 
cent to a reactor where cooling was filtered 
was thoroughly contaminated with radi- 
ation. It took 900 people three months to 
clean up the contamination. 

And in December 1970, a fuel assembly 
melted in another reactor. Melted fuel is 
considered among the worst accidents that 
can occur in a nuclear reactor; it can lead to 
the meltdown of the reactor core and re- 
lease of large amounts of radiation into the 
environment. 

The agency has told Congress that 
efforts to address these types of prob- 
lems—attributed to DOE's lack of 
public accountability— are underway. 

When asked about the "Globe 
Rotter" Award, a Department of 
Energy spokesman responded, "We are 
pursuing an aggressive program to 
remedy all our environmental con- 
cerns." I certainly hope so, Mr. Presi- 
dent. We should all hope that DOE's 
efforts are not too late. 



POSITION ON VOTE 

Mr. HEINZ. Mr. President, on roll- 
call vote No. 349, to invoke cloture on 
the motion to recommit S. 2488 — the 
parental and medical leave bill— I was 
necessarily absent. If I had been 
present, I would have voted "yea." 



THE 35TH ANNIVERSARY OF 
THE AMERICAN POLITICAL 
SCIENCE ASSOCIATION'S CON- 
GRESSIONAL FELLOWSHIP 
PROGRAM 

Mr. SPECTER. Mr. President, I con- 
gratulate the American Political Sci- 
ence Association [APSA] on the occa- 
sion of the 35th anniversary of its 
Congressional Fellowship Program. 

This program is the oldest and best 
known of all the congressional fellow- 
ships. Its members are recommended 
on merit and are selected through a 
rigorous competition. 

Since 1953, APSA has detailed to 
Congress, Federal executives, political 
scientists, journalists, health profes- 
sionals, and foreign professionals from 
a wide variety of backgrounds to learn 
firsthand about the legislative process. 
During the last 35 years more than 
1,000 APSA fellows representing disci- 
plines that range from anthropology 
to finance to nuclear regulation have 
worked in Congress. Many former fel- 
lows then have remained to serve the 
Senate and the House of Representa- 
tives as professional staff. This shar- 
ing of ideas and expertise with Mem- 
bers of Congress and the experience 
that fellows gain through their work, 
serve the Nation as a whole and are 
accomplished at no cost to the taxpay- 
ers. 

In this nonpartisan program, fellows 
often transfer to other offices at the 
midpoint of their 10-month tenure to 
learn about both Chambers and each 
side of the aisle. My own office, for ex- 
ample, has benefited from the service 
of APSA fellows. Mr. Leo Bull, of 
Cheltenham, PA, served as a congres- 
sional fellow with my office from De- 
cember 5, 1987, through August 10, 
1988. As an employment and training 
specialist with the U.S. Department of 
Labor, Leo made a significant contri- 
bution in assisting my office with 
labor legislation and jobs initiatives. 
His knowledge and expertise in this 
important area were greatly appreciat- 
ed. 

Accordingly, I commend to my col- 
leagues the APSA Congressional Fel- 
lowship Progam, and hope it will con- 
tinue to serve Congress as an out- 
standing resource in the future. 



FAREWELL TO SENATOR JOHN 
STENNIS 

Mr. HOLLINGS. Mr. President, with 
the retirement of John Stennis at the 
end of the 100th Congress, the politi- 
cal scientists and pundits will note 
that the Senate is losing a legend, a 
Senator of historic impact and accom- 
plishment within this body. His col- 
leagues do not argue with that assess- 
ment, but forgive us for regretting, 
above all, the departure from the 
Senate of one of our best and most be- 
loved friends. 



It is traditional to measure a Sena- 
tor's influence by the chairmanships 
or leadership posts he holds. As long- 
time chairman of Armed Services, and, 
more recently, as chairman of Appro- 
priations, John Stennis has wielded 
those traditional maces of Senator 
power. He has done so with great skill. 
But the true source of this man's au- 
thority and influence lies in his char- 
acter. I will be categorical on this 
point: I know of no other Senator who 
is more respected and revered for 
qualities of character than John Sten- 
nis. As one political observer put it 
very aptly: 

[Sen. Stennis] projects a dignity and recti- 
tude transcending his physical frailty. His is 
an iron will tempered by grace and a genu- 
ine thoughtfulness about the issues. 

Thirty-five years ago, when the 
President stood silent and the Senate 
was cowed by Joe McCarthy, it was 
John Stennis who took the floor to 
denounce what he called McCarthy's 
"slush and slime." It was this coura- 
geous speech that led directly to 
McCarthy's censure. Likewise, it was 
John Stennis who chaired the newly 
created Select Committee on Stand- 
ards and Conduct in the wake of the 
Bobby Baker scandal. Time and again, 
in crisis and in calm, the Senate has 
turned to John Stennis for guidance 
and leadership— above all, on matters 
of integrity. 

I hope it is no insult to characterize 
an 87-year-old man as "old fashioned," 
but the fact is that John Stennis 
truly does seem a Senator of a bygone 
era: A man for whom honor and duty 
are the supreme values. I can think of 
no other Senator to whom I would 
attach the word "gallant," yet that ad- 
jective fits John Stennis as naturally 
as it fits Robert E. Lee. Neither bullets 
nor cancer have defeated this excep- 
tional man, and he has fulfilled his 
stated intention "to plow a straight 
furrow right down to the end of my 
row." 

Mr. President, as a role model and as 
an inspiration, John Stennis is very 
special to us. Especially in recent 
years, we have admired his courage 
and his tenacity. He will always be a 
man of the Senate— an institution that 
has been ennobled and elevated by his 
presence. We wish John Stennis all 
the best in the years ahead. The 
Senate will miss him very much. 



GODSPEED TO LAWTON CHILES 

Mr. HOLLINGS. Mr. President, at 
the end of the 100th Congress, we will 
say farewell to our esteemed senior 
colleague from Florida, Lawton 
Chiles. I know I speak for his many 
friends in this body in saying that his 
departure will be a great loss to the 
Senate. We will miss his intelligence, 
his gutsiness, and his soft-spoken 
charm. For nearly two decades, 












28292 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



Lawton has been one of the best poli- 
ticians in this body— and, like all 
superb politicians, he bears that label 
proudly. 

Since his days in the Florida state- 
house, Lawton has been an old-fash- 
ioned good-government Democrat. 
Early in his Senate career, he insisted 
that "sunshine is the best disinfect- 
ant" to back-room dealing, and in 1976 
he passed "sunshine" legislation to re- 
quire that Government agencies open 
up their meetings to the public. That 
same refreshing Chiles style was the 
trademark of his campaigns: his 1,003- 
mile hike across Florida, and his dis- 
dain for the stampede to big-bucks 
Senate campaigns. Twelve years ago, 
Lawton announced that he would 
accept no contribution larger than 
$10. In the face of massive out-of- 
State GOP assistance to his opponent 
in 1982, he compromised in degree but 
not in principle, raising his contribu- 
tion ceiling to $100— still a far, far cry 
from the $10,000-per-week norm for 
Senate fundraising. 

In part, it must have been this same 
good-Government penchant that led 
him to take on the thankless job of 
Budget Committee chairman in 1987. 
As ranking Democrat in 1985, he stood 
up for the integrity of the budget 
process by filibustering an attempt to 
pass the agriculture appropriations 
bill in the absence of a budget resolu- 
tion. As chairman, he has worked dog- 
gedly to fashion compromises and 
forge consensus. The Budget chair- 
man's job is to take the punch bowl 
away before the party gets out of 
hand. He makes hard choices, and in 
the process he makes people mad. To 
his everlasting credit, Lawton has had 
the guts to push for tax increases and 
major budget cuts. Through it all, he 
has been low-key, patient, tolerant- 
even toward a certain former Budget 
chairman who insisted on different 
tax and freeze proposals. 

I said just a minute ago that the 
Budget chairmanship is a thankless 
job: well, technically it is not a thank- 
less job— not any more— because today, 
on behalf of the entire Senate, I want 
to say thank you, Lawton, for the un- 
selfish and exceptional job you have 
done the last 2 years. 

Mr. President, since 1964, only one 
U.S. Senator has been reelected from 
the State of Florida: Lawton Chiles. 
Perhaps the best measure of Lawton 's 
sanity and independence is his deci- 
sion to walk away from a Senate seat 
that, in all probability, could have 
been his for another term. Nonethe- 
less, we must respect his decision to 
retire— despite the fact that he is still 
a relative youngster. 

Lawton was an artilleryman in the 
Korean war, and now— with his plans 
for life after the Senate— he apparent- 
ly intends to face retirement with the 
same attitude of old Gen. Oliver 
Smith during the Chosin Reservoir 



withdrawal: "Retreat, hell. It will be 
an attack in a different direction." 

Mr. President, for 18 years in this 
body, Lawton Chiles has served his 
State and Nation with great energy 
and dedication, and in the process he 
has done great service to the Senate as 
an institution. I wish Lawton and 
Rhea all the best. 



A TRIBUTE TO COACH DAVID M. 
"BOO" FERRISS 

Mr. COCHRAN. Mr. President, an 
outstanding Mississippian and a living 
baseball legend has retired after a bril- 
liant career as both a major league 
player and a college coach. 

Coach David M. "Boo" Ferriss has 
just completed his 26th season as head 
baseball coach of the Delta State Uni- 
versity Statesmen in Cleveland, MS. 
He closed out his final season with the 
best record in Delta State's history— 
44 wins and 13 losses. 

Under Coach Ferriss' leadership, 
Delta State has become a recognized 
power in NCAA Division II collegiate 
baseball. His career record at Delta 
State is 639 wins, 387 losses, and 8 ties. 
His teams have won four Gulf South 
Conference championships, three 
NCAA regional titles, and placed 
second once and third twice in the Col- 
lege World Series. 

A native of Shaw, MS, Coach Ferriss 
excelled early in a number of sports. 
His Shaw High School baseball coach, 
James Flack, helped him focus on the 
American pastime, and was responsi- 
ble for converting Ferriss from a 
second baseman to a pitcher, which 
was a stroke of genius. Boo Ferriss 
went on to have a great career at Mis- 
sissippi State University, and was 
signed by the Boston Red Sox after 
his junior year. 

He immediately became a star pitch- 
er for the Red Sox. His outstanding 
season records in 1945 and 1946 made 
him one of the premier pitchers of his 
day. In his initial season, 1945, he 
posted a 21-10 record, was named 
"Rookie of the Year," and defeated 
each American League team the first 
time he faced them. His eight consecu- 
tive wins at the beginning of a career 
is still a record— shared with Fernando 
Valenzuela's 1981 performance. 

Ferriss' 1946 season was even more 
spectacular. As the American League's 
No. 1 pitcher with an amazing 25-6 
record, he pitched the Red Sox to a 4- 
victory over the St. Louis Cardinals 
in the 1946 World Series. With his life- 
time won-loss record at 65-30, an arm 
injury unfortunately brought Boo's 
brilliant and promising career to an 
early end. Boo continued with the Red 
Sox organization for several years as a 
pitching coach. There are many who 
know baseball who feel that, had Boo 
Ferriss not had his pitching career cut 
short, he would be in the Baseball Hall 
of Fame today. 



There are other halls of fame, how- 
ever, in which Boo Ferriss' name and 
reputation are now firmly implanted. 
He is a member of the Mississippi 
Sports Hall of Fame, the Mississippi 
State University Sports Hall of Fame, 
and the Mississippi Semi-Pro Baseball 
Hall of Fame. As a capstone to his 
many honors, this past January, 
Coach Ferriss was elected to the 
American Baseball Coaches Associa- 
tion's Hall of Fame— a tremendous 
tribute to a man who has given so 
much to the game of baseball. 

But it does not take such lofty 
honors to convince Coach Ferriss' 
former players, fans, and supporters of 
his star qualities. People in Mississippi 
and throughout baseball coast to coast 
have long known and respected Boo 
Ferriss as a talented coach and an in- 
spiration to the young men he has 
coached. Not only has Boo been a per- 
sonal success and a big winner on and 
off the playing field, he has also 
touched the lives of his players in so 
many ways. Forty-three of his players 
have earned all-Gulf South Confer- 
ence honors. Eighteen Statesmen play- 
ers have been all-Americans. Seven- 
teen of his stars have gone on to ca- 
reers in the professional leagues. 
Twenty of his players earned academic 
all-America honors. And, it is typical 
of the Boo Ferriss style that today he 
maintains contact with hundreds of 
former players around the country be- 
cause they were once part of his "base- 
ball family." 

Mr. President, I congratulate Boo 
Ferriss on his outstanding career. He 
has been a major influence on profes- 
sional and collegiate baseball, as well 
as a wonderful mentor and example 
for the many young men who have 
had the good fortune to play for him. 

This past summer, Delta State Uni- 
versity honored Boo Ferriss by naming 
the university baseball field for him. 
The university also retired Coach Fer- 
riss' jersey No. 33. Now, Boo is retired 
from the game that he has spent a 
lifetime playing and coaching, and I 
wish him and his wife, Miriam, every 
happiness in the years ahead. 

Boo Ferriss has brought great dis- 
tinction to himself, to Delta State Uni- 
versity, to the State of Mississippi, and 
to the game of baseball. That legacy, 
Mr. President, will never be retired. 



CONCLUSION OF MORNING 
BUSINESS 

The ACTING PRESIDENT pro tem- 
pore. Morning business is closed. 



BERNE CONVENTION 
IMPLEMENTATION ACT OF 1988 

The ACTING PRESIDENT pro tem- 
pore. Under the previous order, the 
Senate will now proceed to the consid- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28293 



eration of S. 1301, which the clerk will 
report. 

The assistant legislative clerk read 
as follows: 

A bill (S. 1301) to amend title 17, United 
States Code, to implement the Berne Con- 
vention for the Protection of Literary and 
Artistic Works, as revised at Paris on July 
24, 1971. and for other purposes. 

The Senate proceeded to consider 
the bill, which had been reported from 
the Committee on the Judiciary with 
an amendment to strike all after the 
enacting clause and insert in lieu 
thereof, the following: 

SECTION I. SHORT TITLE. 

This Act may be cited as the "Berne Con- 
vention Implementation Act of 1988". 

SEC. 2. DECLARATIONS 

The Congress makes the following declara- 
tions: 

(1) The Convention for the Protection of 
Literary and Artistic Works, signed at 
Berne, Switzerland, on September 9, 1986, 
and all acts, protocols, and revisions thereto 
(hereafter in this Act referred to as the 
"Berne Convention") are not self-executing 
under the Constitution and Laws of the 
United States. 

(2) The obligations of the United States 
under the Berne Convention may be per- 
formed only pursuant to appropriate domes- 
tic law. 

(3) The amendments made by this Act, to- 
gether with the law as it exists on the date of 
the enactment of this Act, satisfy the obliga- 
tions of the United States in adhering to the 
Berne Convention and no further rights or 
interests shall be recognized or created for 
that purpose. 

SEC. 3. CONSTRUCTION OF THE BERNE CONVENTION. 

(a) Relationship With Domestic Law.— 
The provisions of the Berne Convention— 

(1) shall be given effect under title 17, 
United States Code, as amended by this Act, 
and any other relevant provision of Federal 
or State law, including common law; and 

(2) shall not be enforceable in any action 
brought pursuant to the provisions of the 
Berne Convention itself. 

<b) Certain Rights Not Affected.— Any 
right of an author of a work, whether 
claimed under Federal, State, or common 
law, to claim authorship of the work, or to 
object to any distortion, mutilation, or other 
modification of, or other derogatory action 
in relation to, the work, that would preju- 
dice the author's honor or reputation, shall 
not be expanded or reduced by virtue of, or 
in reliance upon, the provisions of the Berne 
Convention, the adherence of the United 
States thereto, or the satisfaction of United 
States obligations thereunder. 

SEC. 4. SUBJECT MATTER AND SCOPE OF COPY- 
RIGHTS 

Chapter 1 of title 17 of the United States 
Code is amended— 

(1) in section 101— 

(A) in the definition of "Pictorial, graphic, 
and sculptural works" by striking out in the 
first sentence "technical drawings, dia- 
grams, and models" and inserting in lieu 
thereof "diagrams, models, and technical 
drawings, including architectural plans"; 
and 

IB) by inserting between the definition of 
"Audiovisual works" and the definition of 
"The best edition", the following: 

"The 'Berne Convention' is the Conven- 
tion for the Protection of Literary and Artis- 
tic Works, signed at Berne, Switzerland, on 



September 9, 1886, and all acts, protocols, 
and revisions thereto. 

"A work is a 'Berne Convention work' if— 

"(1) in the case of an unpublished work, 
one or more of the authors is a national of a 
State adhering to the Berne Convention, or 
in the case of a published work, one or more 
of the authors is a national of a State adher- 
ing to the Berne Convention on the date of 
first publication; 

"(2) the work was first published in a 
State adhering to the Berne Convention, or 
was simultaneously published in a State ad- 
hering to the Berne Convention and in a 
foreign nation that does not adhere to the 
Berne Convention; 

"(3) in the case of an audiovisual work— 

"(A) if one or more of the authors is a legal 
entity, that author has its headquarters in a 
State adhering to the Berne Convention; or 

"(B) if one or more of the authors is an in- 
dividual, that author is domiciled, or has 
his or her habitual residence in, a State ad- 
hering to the Berne Convention; or 

"(4) in the case of a pictorial, graphic, or 
sculptural work, such work is incorporated 
in a building or other structure located in a 
State adhering to the Berne Convention. 
For purposes of paragraph (1), an author 
who is domiciled in or has his or her habitu- 
al residence in, a State adhering to the 
Berne Convention is considered to be a na- 
tional of that State. For purposes of para- 
graph (2), a work is considered to have been 
simultaneously published in two or more 
nations if its dates of publication are within 
30 days of one another. "; 

(2) in section 104(b)— 

(A) by redesignating paragraph (4) as 
paragraph (5); and 

(B) by inserting after paragraph (3) the 
following new paragraph (4): 

"(4) the work is a Berne Convention work; 
or"; 

(3) in section 104 by adding at the end 
thereof the following: 

"(c) Effect of Berne Convention.— No 
right or interest in a work eligible for pro- 
tection under this title may be claimed by 
virtue of, or in reliance upon, the provisions 
of the Berne Convention, or the United 
States adherence thereto. Any rights in a 
work eligible for protection under this title 
that derive from this title, other Federal or 
State statutes, or the common law, shall not 
be expanded or reduced by virtue of, or in re- 
liance upon the provisions of the Berne Con- 
vention, or United States adherence there- 
to."; 

(4) in section 108(a)— 

(A) by inserting after the semicolon at the 
end of paragraph (1), "and"; 

(B) by striking out "; and" at the end of 
paragraph (2) and inserting in lieu thereof a 
period; and 

(C) by repealing paragraph (3); and 

(5) by amending section 116 to read as fol- 
lows: 

"§116. Scope of exclusive rights in nondramatic 

musical works: Public performances by means of 

coin-operated phonorecord players 

"(a) This section applies to any nondra- 
matic musical work embodied in a phono- 
record. 

"(b)(1) In the case of a work to which this 
section applies, the exclusive right under 
paragraph (4) of section 106 to perform the 
work publicly by means of a coin-operated 
phonorecord player is limited to the extent 
that paragraph (2) applies. 

"(2) If, one year after the effective date of 
the Berne Convention Implementation Act 
of 1988, the Copyright Royalty Tribunal cer- 
tifies by publication in the Federal Register 



that negotiated licenses authorized by sub- 
section (c) have not come into effect so as to 
provide permission to use a quantity of mu- 
sical works not substantially smaller than 
the quantity of such works performed on 
coin-operated phonorecord players during 
the one-year period ending on the effective 
date of such Act, then section 116 as in effect 
on the day before the effective date of such 
Act shall be effective with respect to musical 
works that are not the subject of such nego- 
tiated licenses. 

"(c)(1) Notwithstanding any provision of 
the antitrust laws, any owners of copyright 
in works to which this section applies and 
any operators of coin-operated phonorecord 
players may negotiate and agree upon the 
terms and rates of royalty payments for the 
performance of such works and the propor- 
tionate division of fees paid among various 
copyright owners, and may designate 
common agents to negotiate, agree to, pay, 
or receive such royalty payments. 

"(2) Parties to such a negotiation, within 
such time as may be specified by the Copy- 
right Royalty Tribunal by regulation, may 
determine the result of the negotiation by 
arbitration. Such arbitration shall be gov- 
erned by the provisions of title 9, to the 
extent such title is not inconsistent with 
this section. The parties shall give notice to 
the Copyright Royalty Tribunal of any de- 
termination reached by arbitration and any 
such determination shall, as between the 
parties to the arbitration, be dispositive of 
the issues to which it relates. 

"(d) License agreements between one or 
more copyright owner and one or more oper- 
ator of coin-operated phonorecord players, 
which are negotiated in accordance with 
subsection (c), shall be given effect in lieu of 
any otherwise applicable determination by 
the Copyright Royalty Tribunal. 

"(e) Not later than 60 days after the effec- 
tive date of the Berne Convention Imple- 
mentation Act of 1988, if the Chairman of 
the Copyright Royalty Tribunal has not re- 
ceived notice, from copyright owners and 
operators of coin-operated phonorecord 
players referred to in subsection (c)(1), of 
the date and location of the first meeting be- 
tween such copyright owners and such oper- 
ators to commence negotiations authorized 
by subsection (c), the Chairman shall an- 
nounce the date and location of such meet- 
ing. Such meeting may not be held more 
than 90 days after the effective date of such 
Act. 

"(f) The Copyright Royalty Tribunal shall 
not conduct any ratemaking activity with 
respect to coin-operated phonorecord play- 
ers unless, at any time more than one year 
after the effective date of the Berne Conven- 
tion Implementation Act of 1988, the negoti- 
ated licenses adopted by the parties under 
this section do not provide permission to 
use a quantity of musical works not sub- 
stantially smaller than the quantity of such 
works performed on coin-operated phonorec- 
ord players during the one-year period 
ending on the effective date of such Act. 

"(g) Until such time as licensing provi- 
sions are determined by the parties under 
this section, the terms of the compulsory li- 
cense, with respect to the public perform- 
ance of nondramatic musical works by 
means of coin-operated phonorecord play- 
ers, which is in effect on the day before the 
effective date of the Berne Convention Im- 
plementation Act of 1988, shall remain in 
force. If the negotiated licenses authorized 
by this section come into force so as to su- 
persede previous determinations of the 
Copyright Royalty Tribunal, as provided in 



28294 



CONGRESSIONAL RECORD— SENATE 



subsection (d), but thereafter are terminated 
or expire without replacement by subsequent 
agreements, then section 116 as in effect on 
the day before the effective date of such Act 
shall be effective with respect to musical 
works that are not the subject of such nego- 
tiated licenses. 

"(h) As used in this section, the following 
terms and their variant forms mean the fol- 
lowing: 

"(1) A 'coin-operated phonorecord player' 
is a machine or device that— 

"(A) is employed solely for the perform- 
ance of nondramatic musical works by 
means of phonorecords upon being activat- 
ed by insertion of coins, currency, tokens, or 
other monetary units or their equivalent; 

"(B) is located in an establishment 
making no direct or indirect charge for ad- 
mission; 

"(C) is accompanied by a list of the titles 
of all the musical works available for per- 
formance on it, which list is affixed to the 
phonorecord player or posted in the estab- 
lishment in a prominent position where it 
can be readily examined by the public; and 
"(D) affords a choice of works available 
for performance and permits the choice to be 
made by the patrons of the establishment in 
which it is located. 

"(2) An 'operator' is any person who, alone 
or jointly with others— 

"(A) owns a coin-operated phonorecord 
player; or 

"(B) has the power to make a coin-operat- 
ed phonorecord player available for place- 
ment in an establishment for purposes of 
public performance; or 

"(C) has the power to exercise primary 
control over the selection of the musical 
works made available for public perform- 
ance on a coin-operated phonorecord 
player. ". 

SEC. 5. RECORDATION. 

Section 205 of title 17, United States Code, 
is amended— 

(1) by striking out subsection (d); and 

(2) by redesignating subsections (e) and (f) 
as subsections (d) and (e), respectively. 

SEC. S. PREEMPTION WITH RESPECT TO OTHER 
LA WS NOT AFFECTED. 

Section 301 of title 17, United States Code, 
is amended by adding at the end thereof the 
following: 

"(e) The scope of preemption under this 
section shall be neither expanded nor re- 
duced by virtue of, or in reliance upon, the 
adherence of the United States to the Berne 
Convention, or the satisfaction of United 
States obligations thereunder. ". 

SEC. 7. NOTICE OF COPYRIGHT. 

(a) Visually Perceptible Copies.— Section 
401 of title 1 7, United States Code is amend- 
ed— 

(1) in subsection (a) by striking out "shall 
be placed on all" and inserting in lieu there- 
of "may be placed on"; 

(2) in subsection (b) by striking out "The 
notice appearing on the copies" and insert- 
ing in lieu thereof "If a notice appears on 
the copies, it"; 

(3) by striking out "The notice" in subsec- 
tion (c), and inserting in lieu thereof "Any 
notice referred to in subsection (a)"; and 

(4) by adding at the end the following: 
"(d) Evidentiary Weight of Notice.— If a 

notice of copyright in the form and position 
specified by this section appears on the pub- 
lished copy or copies to which a defendant 
in a copyright infringement suit had access, 
then no weight shall be given to such a de- 
fendant's interposition of a defense based on 
'innocent infringement' in mitigation of 
actual or statutory damages. ". 



October 5, 1988 



(b) Phonorecords of Sound Record- 
ings.— Section 402 of title 17, United States 
Code, is amended— 

(1) in subsection (a) by striking out "shall 
be placed on all" and inserting in lieu there- 
of "may be placed on"; 

(2) by striking out "The notice appearing 
on the phonorecords " in subsection (b), and 
inserting in lieu thereof "If a notice appears 
on the phonorecords, it"; 

(3) by striking out "The notice" in subsec- 
tion (c), and inserting in lieu thereof "Any 
notice referred to in subsection (a)"; and 

(4) by adding at the end thereof the follow- 
ing new subsection: 

"(d) Evidentiary Weight of Notice.— If a 
notice of copyright in the form and position 
specified by this section appears on the pub- 
lished copy or copies to which a defendant 
in a copyright infringement suit had access, 
then no weight shall be given to such a de- 
fendant's interposition of a defense based on 
'innocent infringement' in mitigation of 
actual or statutory damages. ". 

(c) Publications Incorporating United 
States Government Works.— Section 403 of 
title 17, United States Code, is amended by 
amending such section to read as follows: 

"Sections 401(d) and 402(d) shall not 
apply to a work published in copies or 
phonorecords consisting preponderantly of 
one or more works of the United States Gov- 
ernment unless the notice of copyright ap- 
pearing on the published copies or phonore- 
cords to which a defendant in the copyright 
infringement suit had access includes a 
statement identifying, either affirmatively 
or negatively, those portions or the copies or 
phonorecords embodying any work or works 
protected under this title. ". 

(d) Notice of Copyright; Contributions 
to Collective Works.— Section 404 of title 
1 7, United States Code, is amended— 

(1) in subsection (a), by striking out "to 
satisfy the requirements of sections 401 
through 403", and inserting in lieu thereof 
"to invoke the provisions of section 401(d) 
or 402(d), as applicable"; and 

(2) in subsection (b), by striking out 
"Where" and inserting in lieu thereof, "With 
respect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
where". 

(e) Omission of Notice.— Section 405 of 
title 1 7, United States Code, is amended— 

(1) in subsection (a), by striking out "The 
omission of the copyright notice prescribed 
by" and inserting in lieu thereof "With re- 
spect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, the 
omission of the copyright notice described 
in"; 

(2) in subsection (b), by striking out 
"omitted, " in the first sentence and insert- 
ing in lieu thereof "omitted and which was 
publicly distributed by authority of the 
copyright owner before the effective date of 
the Berne Convention Implementation Act 
of 1988,"; and 

(3) by amending the heading of section 405 
to read as follows: 

"§405. Notice of Copyright- Omission of Notice on 
Certain Copies and Phonorecords " 

(f) Error in Name or Date.— Section 406 
of title 1 7, United States Code, is amended— 

(1) in the section heading by inserting "on 
certain copies and phonorecords" after 
"date"; 

(2) in subsection (a) by striking out 
"Where" and inserting in lieu thereof "With 



respect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
where"; 

(3) in subsection (b) by inserting "before 
the effective date of the Berne Convention 
Implementation Act of 1988" after "distrib- 
uted"; and 

(4) in subsection (c>— 

(A) by inserting "before the effective date 
of the Berne Convention Implementation 
Act of 1988" after "publicly distributed"; 
and 

(B) by inserting after "405" the following: 
"as in effect on the day before the effective 
date of the Berne Convention Implementa- 
tion Act of 1988". 

(g) Clerical Amendment.— The table of sec- 
tions at the beginning of chapter 4 of title 
1 7, United States Code, is amended by strik- 
ing out the items relating to sections 405 
and 406 and inserting in lieu thereof the fol- 
lowing: 

"405. Notice of copyright: Omission of 

notice on certain copies and 

phonorecords. 
"406. Notice of copyright: Error in name or 

date on certain copies and 

phonorecords. ". 

SEC. 8. DEPOSIT OF COPIES OR PHONORECORDS FOR 
LIBRARY OF CONGRESS. 

Section 407 of title 17, United States Code, 
is amended in subsection (a), by striking out 
"with notice of copyright". 

SEC. 9. COPYRIGHT REGISTRATION. 

(a) Registration in General.— Section 408 
of title 1 7, United States Code, is amended— 

(1) in subsection (a), by striking out "Sub- 
ject to the provisions of section 405(a), 
such" in the second sentence and inserting 
in lieu thereof "Such"; 

(2) in subsection (c)(2)— 

(A) by striking out "all of" in the matter 
before subparagraph (A); 

(B) by striking out subparagraph (A); and 

(C) by redesignating subparagraphs (B) 
and (C) as subparagraphs (A) and <B), re- 
spectively. 

(b) Infringement Actions. — 

(1) Registration as a prerequisite.— Sec- 
tion 411 of title 17, United States Code, is 
amended to read as follows: 

"§411. Registration and infringement actions 

"(a) Registration is not a prerequisite to 
the institution of a civil action for infringe- 
ment of copyright. 

"(b) In the case of a work consisting of 
sounds, images, or both, the first fixation of 
which is made simultaneously with its 
transmission, the copyright owner may, 
either before or after such fixation takes 
place, institute an action for infringement 
under section 501, fully subject to the reme- 
dies provided by sections 502 through 506 
and sections 509 and 510, if, in accordance 
with requirements that the Register of Copy- 
rights shall prescribe by regulation, the 
copyright owner serves notice upon the in- 
fringer, not less than 10 or more than 30 
days before such fixation, identifying the 
work and the specific time and source of its 
first transmission, and declaring an inten- 
tion to secure copyright in the work. ". 

(2) Table of sections.— The table of sec- 
tions at the beginning of chapter 4 of such 
title 17, United States Code, is amended by 
striking out the item relating to section 411 
and inserting in lieu thereof the following: 
"411. Registration and infringement ac- 
tions. ". 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28295 



SEC. 10. COPYRIGHT INFRINGEMENT AND REMEDIES. 

(a) Infringement.— Section 501(b) of title 
1 7, United States Code, is amended by strik- 
ing out "sections 205(d) and 411," and in- 
serting in lieu thereof "section 411(b),". 

(b) Damages and Profits.— Section 504(c) 
of title 1 7, United States Code, is amended— 

(1) in paragraph (1)— 

(A) by striking out "$250", and inserting 
in lieu thereof "$500"; and 

(B) by striking out "$10,000", and insert- 
ing in lieu thereof "$20,000"; and 

(2) in paragraph (2)— 

(A) by striking out "$50,000.", and insert- 
ing in lieu thereof "$100,000. "; and 

(B) by striking out "$100.", and inserting 
in lieu thereof "$200. ". 

SEC. II. COPYRIGHT ROYALTY TRIBUNAL 

Chapter 8 of title 1 7, United States Code, 
is amended — 

(1) in section 801, by adding at the end of 
subsection (b) the following: "In determin- 
ing whether a return to a copyright owner 
under section 116 is fair, appropriate weight 
shall be given to— 

"(i) the rates most recently determined by 
the Tribunal to provide a fair return to the 
copyright owner, and 

"(ii) the rates contained in any license ne- 
gotiated under the authorization of section 
116 of this title. "; and 

(2) in section 804, by striking out the 
period at the end of section 804(a)(2)(C) and 
inserting in lieu thereof the following: ", and 
at any time within 1 year after negotiated 
licenses authorized by section 116 are termi- 
nated or expire without replacement by sub- 
sequent agreements; and 

"(3) if negotiated licenses authorized by 
section 116 come into force so as to super- 
sede previous determinations of the Tribu- 
nal, as provided in section 116(d), but there- 
after are terminated or expire without re- 
placement by subsequent agreements, the 
Tribunal shall, upon petition of any party 
to such terminated or expired negotiated li- 
cense agreement, promptly establish an in- 
terim royalty rate or rates for the public per- 
formance by means of a coin-operated pho- 
norecord player of nondramatic musical 
works embodied in phonorecords which had 
been subject to the terminated or expired ne- 
gotiated license agreement. Such interim 
royalty rate or rates shall remain in force 
until the conclusion of proceedings to adjust 
the royalty rates applicable to such works, 
or until superseded by a new negotiated li- 
cense agreement, as provided in section 
116(d). The Tribunal may order that the roy- 
alty rates finally determined by the Tribunal 
to be reasonable shall be retroactive to the 
date such previously negotiated license 
agreements were terminated or expired. ". 

SEC. 12. WORKS IN THE PUBLIC DOMAIN. 

Title 17, United States Code, as amended 
by this Act, does not provide copyright pro- 
tection for any work that is in the public 
domain in the United States. 

SEC. 13. EFFECTIVE DATE; EFFECT ON PENDING 

CASES. 

(a) Effective Date.— This Act and the 
amendments made by this Act take effect on 
the same day the Berne Convention (as de- 
fined in section 101 of title 17, United States 
Code) enters into force with respect to the 
United States. 

(b) Effect on Pending Cases.— Any cause 
of action arising under title 17, United 
States Code, before the effective date of this 
Act shall be governed by the provisions of 
such title as in effect when the cause of 
action arose. 

Mr. DOLE. Mr. President, is my time 
reserved? 



The ACTING PRESIDENT pro tem- 
pore. That is correct. 



BICENTENNIAL MINUTE 

JANUARY 31, 18 73: SENATE ABOLISHES THE 
FRANK 

Mr. DOLE. Mr. President, 115 years 
ago, on January 31, 1873, the U.S. 
Senate abolished its free franking 
privileges. This information may come 
as a surprise, since in fact the Senate 
still sends its mail out under the 
frank, but let me explain how this sit- 
uation came to pass. 

The ability of legislators to send 
mail by using their signature rather 
than postage dates back to the British 
House of Commons in the 17th centu- 
ry. The Continental Congress adopted 
the procedure during the American 
Revolution, and the first Congress 
wrote it into law in 1789. During the 
19th century, the press began to com- 
plain of abuses in congressional use of 
the frank. 

Some Senators supposedly used the 
frank to send their laundry home each 
week, others franked barrels of china, 
bedding, and other household goods. 
Legend has it that one antebellum 
Senator even attached his frank to his 
horse's bridle and sent the animal 
back home. More seriously, critics ac- 
cused incumbents of flooding the 
mails with Government documents, 
speeches, and packages of seed from 
the Agriculture Department, all de- 
signed to enhance their reelection 
prospects. 

These charges became so widespread 
that in 1873 Congress abolished the 
frank. But the new law made no provi- 
sion for payment of legitimate mail- 
ings, such as sending copies of the 
Congressional Record and other 
public documents that their constitu- 
ents might request. So, 2 years later, 
in 1875, Congress permitted these doc- 
uments to be sent out postage-free. 

Then there was correspondence with 
other Government agencies. In 1883, 
Congress required that all executive 
agencies enclose franked envelopes in 
their official communications with 
Congress. Because this cumbersome 
system still did not solve all problems 
of mailing, in 1891 Congress at last re- 
stored full franking privileges to its 
Members, with specific rules to pre- 
vent further abuse, which probably 
have not worked all that well. 



THE SENATE'S SCHEDULE 

Mr. DOLE. Mr. President, I will also 
indicate very briefly, because I know 
there is another matter on the floor, 
that we hope to be able today, at least 
on this side, to say that we have an 
agreement on the drug bill; we are 
ready to do business on the drug bill. 
It seems to me that that ought to be 
the first order of the day, either the 
drug bill or the tax bill. I guess we are 



going to be around here at least 2 or 3 
more weeks, so we might as well take 
our time. 

But I do hope that we can move on 
to matters of importance and stop 
playing games with this parental leave 
and child care and the other bill that 
is wrapped up in that package. Every- 
one knows that is not going to pass, 
not going to become law. 

So we hope today, before the day is 
over, at least on this side, to go to the 
majority leader and say that we have 
an agreement on drugs. We want to go 
to the drug bill and the tax bill. We 
are going to stop playing games with 
what is on the floor. We want to get 
out of here. We want to go home. 

Maybe the Democrats have made a 
judgment that it is better for their in- 
cumbents who are running to be on 
the floor. But I think we have an obli- 
gation, all of us, all of our colleagues— 
particularly those who are up for re- 
election—to get back to their States 
and do what best they can in their 
own election efforts. I am advising my 
colleagues on this side to do precisely 
that. 

We cannot stick around here forever 
because somebody wants to keep us 
here with some legislation that has no 
chance of passage. The House is going 
to be out 4 or 5 days. They are coming 
back 2 or 3 days next week. 

So, we do not intend to play that 
game. We are not the majority, but we 
have some rights in the minority and 
we are prepared to cooperate with the 
tax legislation and the drug legislation 
but little else. 

We have tried cooperation. It has 
not worked. So, we want to get out of 
here. We have done the business. We 
have cooperated. We passed all the ap- 
propriations bills. We have worked on 
welfare reform; we have worked on a 
number of things that needed the at- 
tention in the hope and on the theory 
that we would complete our work and 
go home. 

But now we are advised, well, we will 
probably be here next week and every- 
body knows it is going to be into the 
next week, so it will probably be the 
22d, maybe even the next week. There 
is no way we can do a tax bill and a 
drug bill in a couple of days or 3 days 
or 5 days. 

I suggest that we all recognize the 
facts of life and do our work. Keeping 
this bill on the floor is not going to 
turn the tide for Dukakis. I under- 
stand that was discussed in the policy 
luncheon yesterday. 

I do not think it will turn the tide 
for Governor Dukakis, and it will not 
have any impact for George Bush 
either. 

I do not find many people demand- 
ing that we take action on the issues 
that are on the floor today. So, I hope 
that we can reach some agreement. 
We are going to go home sometime. 



28296 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



And let minority Members know. Oth- 
erwise I do not know how we can con- 
tinue to cooperate, and we are not 
going to let the bill be set aside and 
take up something else and set it 
aside. Get cloture, that is fine. But we 
are ready to do business. We are ready 
to do the business that is important, 
but not just do the monkey business. 
We have had enough of that. 

We are ready to do the drug bill. We 
are ready to do the tax bill. We are 
ready to do other important matters 
that have to be dealt with, and there 
are a number of those: judges, geno- 
cide implementing legislation, and 
others that may be on the majority 
leader's list. But we hope that we will 
be given some consideration because if 
we stay here to the 15th or the 22d, we 
have precisely 2V 2 weeks before the 
election. And I was compelled to do 
that in 1986, so I can speak for some. 
We were here, I think, until the 20th 
or the 18th. 

I took a lot of heat from some of my 
colleagues. Some did not get back and 
they always thought had they been 
out earlier they might have been re- 
elected. Who knows? 

I hope we can work out some sched- 
ule so we are going to have a date of 
adjournment so it does not go week to 
week to week. As some of my col- 
leagues pointed out yesterday, it is 
pretty hard to plan when you are run- 
ning for reelection if nobody tells you 
when we are going to leave this place. 
How can you set up some event 2 
weeks from now and then find a very 
important vote here? 

Maybe that is the strategy, keep the 
Republicans here. Maybe the Demo- 
cratic incumbents are in good shape. I 
think ours are, too. But we believe 
that it is the election season. We have 
had a good year, we passed the appro- 
priation bills, we passed welfare 
reform, we have done a lot of things 
that I think, if you look back on, 
people said, "Oh, that will not happen 
in this Congress." And it has all hap- 
pened because we have had a spirit of 
cooperation. 

I must say after our policy luncheon 
yesterday, that has rapidly deteriorat- 
ed. I am going to do the best I can to 
cooperate with the majority leader. He 
has the toughest job in town. But I 
must say in advance, it is not going to 
be easy because some of my Members 
do not want to consent to anything— 
anything— until we have some specific 
idea of when we are going to leave this 
place and what the business is going to 
be for the remainder of the year. 

Mr. BYRD. Mr. President, I ask 
unanimous consent to speak for 5 min- 
utes out of order. 

The PRESIDING OFFICER. Is 
there objection? Without objection, it 
is so ordered. 

Mr. BYRD. Mr. President, I certain- 
ly understand the frustration of the 
distinguished Republican leader and I 



often have a similar sense of frustra- 
tion. And he is right in saying that we 
have passed some very important legis- 
lation. We have established what I 
think is an excellent record for the 
100th Congress. And it has only been 
accomplished through the cooperation 
of the leadership on both sides of the 
aisle. There have been times, of 
course, when we differed on measures 
and that is to be expected. 

Let me say to the distinguished Re- 
publican leader, I do not recall any dis- 
cussion in our conference yesterday to 
the effect that the profamily package 
of day care, parental leave, and child 
pornography, would turn the tide for 
Mr. Dukakis. I do not have any recol- 
lection of such comments having been 
made. 

Mr. President, it is not monkey busi- 
ness. Day care legislation, child por- 
nography, parental leave— that is not 
monkey business. 

In West Virginia, 46 percent of the 
women with children between the ages 
of 6 and 17 have to work outside the 
home. And that is a lower percentage 
than the nationwide percentage. 

In West Virginia, there are 15 coun- 
ties out of the 55 that have no day 
care facilities. 

In West Virginia, 32 percent of the 
women who have children under 6 
years of age have to work outside the 
home. And they are not doing it to 
buy a second Porsche. They are doing 
it because they are either the heads of 
families or they are married to men 
whose salaries are under $15,000. 

So, it is not monkey business when 
we deal with legislation to provide reg- 
ulated day care, to provide it with ade- 
quate safety and health, for those 
children to have to be let out in the 
morning, when the mothers go to 
work, to the care of someone. That is 
not monkey business. 

The deal on yesterday was no deal at 
all, that the Republican leader offered 
to me. What we see going on here is an 
effort to kill this bill. And it is not too 
subtle. For those Senators who want a 
date when the Senate and House will 
adjourn, I do not know of anyone who 
can give Senators a date. We all sign 
on when we take the oath of office up 
there, we sign on for our pay and that 
continues when we are out campaign- 
ing. We do not have to worry about 
our checks. They will continue to roll 
in. 

We signed on to do our job. And I 
can understand with some sympathy, 
those who feel that they have to get 
out of "this place," the Senate of the 
United States, which is not just "this 
place." It is an institution for which 
most of us would have given our right 
arm to be a Member of. So, it is not 
just "this place." 

We will go home. I am running also. 
We will go home. There will be some 
time to campaign. 



But first we have a responsibility to 
do our work, and if the Republicans 
want to kill this bill, if they have the 
votes, they can do that. If they want 
to vote against cloture, they can do 
that, but at least we are going to make 
the effort. As I always have tried to 
do, if I lose, I smile. It is all over. If we 
do not have the votes, we do not have 
the votes, but let us see. 

The President said on yesterday, I 
believe it was, "Get on with the drug 
bill. The drug bill has been on the cal- 
endar a long time," or something to 
that effect. The drug bill was not even 
introduced until Monday, the day 
before yesterday. Of course, there is a 
House bill over here on the calendar. 
The distinguished Republican leader 
and I have put two working groups to- 
gether, good men and women, to devel- 
op a bipartisan drug bill. Those Mem- 
bers spent months, weeks, days, hours, 
and they came up with a good bill, but 
it has not been on the calendar a long 
time. The President should be notified 
of that. 

We will get to that drug bill. The 
Senate drug bill is 610 pages, and the 
other Members of the Senate who are 
not on those working groups and the 
staffs who are not associated with 
those working groups certainly have a 
right and a responsibility to know 
what is in that bill. It takes a little 
while for that. 

So, there is no reason to blame 
anyone because the drug bill has not 
been brought up. It will be brought 
up. I hope we can limit amendments. I 
would prefer having cloture on the 
drug bill. If Senators want to get out 
of "this place," let us have cloture on 
the drug bill and prevent the nonger- 
mane amendments from being called 
up. 

I am for the death penalty. It was 
my recommendation that it be put in 
the bill so that it would not be offered 
as an amendment and thus create a fil- 
ibuster on that amendment. We put it 
in the bill and it is a part of the bill. If 
Senators want to filibuster the death 
penalty, they would have to filibuster 
the whole bill. 

I am as interested as anyone else in 
getting these measures passed. There 
are some items in the tax technical 
corrections amendments that I very 
much want to see enacted into law. We 
have time. We have Wednesday, today; 
Thursday, Friday, and Saturday of 
this week. We will be out on Monday 
for Columbus Day. What is wrong? If 
it is required to get the people's work 
done on this important legislation, 
then we will be back next week. The 
House will be back and there is no 
reason why, no justifiable reason why 
we cannot complete that work. 

We can do this bill, the bill the dis- 
tinguished leader has been talking 
about. We can do the drug bill and, 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28297 



hopefully, we can do the tax bill if we 
all set our heads to do it. 

Mr. President, I ask that the time be 
extended 4 minutes, and I yield 2 min- 
utes to the Republican leader. 

Mr. LEAHY. Mr. President, reserv- 
ing the right to object, and I shall not 
object, but just so I can tell 

The ACTING PRESIDENT pro tem- 
pore. Does the majority leader yield? 

Mr. BYRD. Mr. President, I yield 
the floor. I ask that the distinguished 
Republican leader have 2 additional 
minutes. 

Mr. LEAHY. I thought it was a 
unanimous-consent request. 

Mr. BYRD. It is. 

Mr. LEAHY. Reserving the right to 
object, and I shall not, we are holding 
a major Agriculture Committee meet- 
ing right now. I set that aside to follow 
the unanimous-consent agreement on 
Berne at 10:30. I am just curious as to 
how much longer it might be, other- 
wise I will go back to the Agriculture 
Committee. 

Mr. BYRD. Two minutes. 

Mr. LEAHY. I have no objection. 

Mr. DOLE. I apologize to the Sena- 
tor from Vermont and to the Senator 
from Arizona who is also here for the 
Berne Convention which is very im- 
portant. I say quickly, we are not in- 
ferring monkey business of the issues. 
If we really want to get on the drug 
bill, we can start today. Why not do 
the business we ought to do? That is 
the drug bill and tax bill which has 
been on the calendar since August 3d. 
The technical corrections amendments 
bill has been hanging around here 
August, September, October. It is very 
important. Every farmer in my State 
is more concerned about that bill on 
the diesel tax and so-called heifer tax, 
and a lot of other business people are 
concerned about provisions in the 
technical corrections. 

We have 100-some amendments 
filed. It is going to take Senator 
Baucus and Senator Packwood I do 
not know how long to fight off those 
amendments. 

My only plea is, if you can get clo- 
ture on these bills, this child care bill 
that only covers 7 percent of the 
people, might cover all of them in 
West Virginia, but there would not be 
any left, it has Federal standards and 
it has the Government telling you how 
to take care of your children. If that is 
what they want in West Virginia, they 
can have it. 

A lot of these bills are not what they 
are cracked up to be. They have been 
slogans, and we have yet to offer a 
single amendment on this side. We 
have been closed out. We cannot offer 
amendments. We are supposed to vote 
for something we cannot even amend, 
correct, and have State standards and 
do a lot of other things to the bill. 

We are not going to quarrel about 
child care, parental leave, and all 
those things that are going to be 



around next year and there will be a 
lot of national debate on them. 

My plea is, let us move on to the 
issues that we are ready to move on. 
We have bipartisan support on a drug 
bill. Cloture would probably be a good 
alternative, if we cannot get unani- 
mous consent. On our side, we already 
agreed to offer six amendments, 
period. I am ready to stand up, I hope 
in the next couple of hours, and say 
we can do it on this side with one 
amendment, to the leader, and the 
same would be on the other side. We 
may be able to do that. If we did that, 
we can do that bill in 2 days. 

We want to cooperate, but we really 
think we ought to get into the busi- 
ness and not get into the money busi- 
ness of every day talking about legisla- 
tion that we cannot amend and we 
know is not going to pass, it has not 
even been considered by the House. It 
is an election year ploy, and we under- 
stand that. We would do the same 
probably, maybe on other issues, if we 
were in the majority. Enough is 
enough. Let us go home. 

Mr. BYRD. Mr. President, I ask for 
30 seconds. 

The ACTING PRESIDENT pro tem- 
pore. Without objection, it is so or- 
dered. 

Mr. BYRD. I did not intend to re- 
spond. I thought the distinguished Re- 
publican leader should have the last 
word, but he made a remark about 
West Virginia. I do not intend, and I 
am sure the Republican leader does 
not intend, to see this encounter devel- 
op into something rather acerbic or 
acrid, but the distinguished Republi- 
can leader said his farmers want the 
heifer tax and other things. I am not 
going to say anything about the State 
of Kansas or the people of Kansas. I 
hope we will not become too wrapped 
up in our arguments that we start 
talking in terms that might not be too 
amicably received. 

I yield the floor. 

The ACTING PRESIDENT pro tem- 
pore. Who seeks recognition? 

Mr. DeCONCINI addressed the 
Chair. 

The ACTING PRESIDENT pro tem- 
pore. The Senator from Arizona. 



BERNE CONVENTION 
IMPLEMENTATION ACT OP 1988 

The Senate continued with the con- 
sideration of the bill. 

Mr. DeCONCINI. May I ask the 
Chair the pending business? 

The ACTING PRESIDENT pro tem- 
pore. The question is on the commit- 
tee substitute to S. 1301. 

Mr. DeCONCINI. I yield to the Sen- 
ator from Vermont who has an amend- 
ment to offer. 

The ACTING PRESIDENT pro tem- 
pore. The Senator from Vermont. 



AMENDMENT NO. 3411 

(Purpose: To amend provisions regarding 
registration, to make technical amend- 
ments, and for other purposes.) 
Mr. LEAHY. Mr. President, I thank 
the distinguished senior Senator from 
Arizona, and I send an amendment, in 
the nature of a substitute, to the desk 
for myself, Senator DeConcini and 
Senator Hatch and ask for its immedi- 
ate consideration. 

The ACTING PRESIDENT pro tem- 
pore. The clerk will report. 
The legislative clerk read as follows: 
The Senator from Vermont [Mr. Leahy], 
for himself, Mr. DeConcini and Mr. Hatch 
proposes an amendment numbered 3411. 

Mr. LEAHY. Mr. President, I ask 
unanimous consent that the reading of 
the amendment be dispensed with. 

The ACTING PRESIDENT pro tem- 
pore. Without objection, it is so or- 
dered. 

The amendment is as follows: 

In lieu of the language proposed to be in- 
serted, insert the following: 

SECTION 1. SHORT TITLE AND REFERENCES TO 
TITLE 17, UNITED STATES CODE. 

(a) Short Title.— This Act may be cited 
as the "Berne Convention Implementation 
Act of 1988". 

(b) References to Title 17, United 
States Code.— Whenever in this Act an 
amendment or repeal is expressed in terms 
of an amendment to or a repeal of a section 
or other provision, the reference shall be 
considered to be made to a section or other 
provision of title 17, United States Code. 

SEC 2. DECLARATIONS. 

The Congress makes the following decla- 
rations: 

(1) The Convention for the Protection of 
Literary and Artistic Works, signed at 
Berne, Switzerland, on September 9, 1886, 
and all acts, protocols, and revisions thereto 
(hereafter in this Act referred to as the 
"Berne Convention") are not self-executing 
under the Constitution and laws of the 
United States. 

(2) The obligations of the United States 
under the Berne Convention may be per- 
formed only pursuant to appropriate domes- 
tic law. 

(3) The amendments made by this Act, to- 
gether with the law as it exists on the date 
of the enactment of this Act, satisfy the ob- 
ligations of the United States in adhering to 
the Berne Convention and no further rights 
or interests shall be recognized or created 
for that purpose. 

SEC. 3. CONSTRUCTION OF THE BERNE CONVEN- 
TION. 

(a) Relationship With Domestic Law.— 
The provisions of the Berne Convention— 

(1) shall be given effect under title 17, as 
amended by this Act, and any other rele- 
vant provision of Federal or State law, in- 
cluding the common law; and 

(2) shall not be enforceable in any action 
brought pursuant to the provisions of the 
Berne Convention itself. 

(b) Certain Rights Not Affected.— The 
provisions of the Berne Convention, the ad- 
herence of the United States thereto, and 
satisfaction of United States obligations 
thereunder, do not expand or reduce any 
right of an author of a work, whether 
claimed under Federal, State, or the 
common law — 

(1) to claim authorship of the work; or 






28298 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



(2) to object to any distortion, mutilation, 
or other modification of, or other derogato- 
ry action in relation to, the work, that 
would prejudice the author's honor or repu- 
tation. 

SEC. 4. SUBJECT MATTER AND SCOPE OF COPY- 
RIGHTS. 

(a) Subject and Scope.— Chapter 1 is 
amended— 
(1) in section 101— 

(A) in the definition of "Pictorial, graphic, 
and sculptural works" by striking out in the 
first sentence "technical drawings, dia- 
grams, and models" and inserting in lieu 
thereof "diagrams, models, and technical 
drawings, including architectural plans"; 

(B) by inserting after the definition of 
"Audiovisual works", the following: 

"The 'Berne Convention' is the Conven- 
tion for the Protection of Literary and Ar- 
tistic Works, signed at Berne, Switzerland, 
on September 9, 1886, and all acts, proto- 
cols, and revisions thereto. 

"A work is a 'Berne Convention work' if— 

"(1) in the case of an unpublished work, 
one or more of the authors is a national of a 
nation adhering to the Berne Convention, 
or in the case of a published work, one or 
more of the authors is a national of a nation 
adhering to the Berne Convention on the 
date of first publication; 

"(2) the work was first published in a 
nation adhering to the Berne Convention, 
or was simultaneously first published in a 
nation adhering to the Berne Convention 
and in a foreign nation that does not adhere 
to the Berne Convention; 

"(3) in the case of an audiovisual work— 

"(A) if one or more of the authors is a 
legal entity, that author has its headquar- 
ters in a nation adhering to the Berne Con- 
vention; or 

"(B) if one or more of the authors is an in- 
dividual, that author is domiciled, or has his 
or her habitual residence in, a nation adher- 
ing to the Berne Convention; or 

"(4) in the case of a pictorial, graphic, or 
sculptural work that is incorporated in a 
building or other structure, the building or 
structure is located in a nation adhering to 
the Berne Convention. 

For purposes of paragraph (1), an author 
who is domiciled in or has his or her habitu- 
al residence in, a nation adhering to the 
Berne Convention is considered to be a na- 
tional of that nation. For purposes of para- 
graph (2), a work is considered to have been 
simultaneously published in two or more na- 
tions if its dates of publication are within 30 
days of one another."; and 

(C) by inserting after the definition of 
"Copyright owner", the following: 

"The 'country of origin' of a Berne Con- 
vention work, for purposes of section 411, is 
the United States if — 

"(1) in the case of a published work, the 
work is first published— 

"(A) in the United States; 

"(B) simultaneously in the United States 
and another nation or nations adhering to 
the Berne Convention, whose law grants a 
term of copyright protection that is the 
same as or longer than the term provided in 
the United States; 

"(C) simultaneously in the United States 
and a foreign nation that does not adhere to 
the Berne Convention; or 

"(D) in a foreign nation that does not 
adhere to the Berne Convention, and all of 
the authors of the work are nationals, domi- 
ciliaries, or habitual residents of, or in the 
case of an audiovisual work legal entities 
with headquarters in, the United States; 



"(2) in the case of an unpublished work, 
all the authors of the work are nationals, 
domiciliaries, or habitual residents of the 
United States, or, in the case of an unpub- 
lished audiovisual work, all the authors are 
legal entities with headquarters in the 
United States; or 

"(3) in the case of a pictorial, graphic, or 
sculptural work incorporated in a building 
or structure, the building or structure is lo- 
cated in the United States. 
For the purposes of section 411, the 'coun- 
try of origin' of any other Berne Convention 
work is not the United States."; 

(2) in section 104(b)— 

(A) by redesignating paragraph (4) as 
paragraph (5); and 

(B) by inserting after paragraph (3) the 
following new paragraph: 

"(4) the work is a Berne Convention work; 
or"; 

(3) in section 104 by adding at the end 
thereof the following: 

"(c) Effect of Berne Convention.— No 
right or interest in a work eligible for pro- 
tection under this title may be claimed by 
virtue of, or in reliance upon, the provisions 
of the Berne Convention, or the adherence 
of the United States thereto. Any rights in a 
work eligible for protection under this title 
that derive from this title, other Federal or 
State statutes, or the common law, shall not 
be expanded or reduced by virtue of, or in 
reliance upon, the provisions of the Berne 
Convention, or the adherence of the United 
States thereto."; and 

(4) by inserting after section 116 the fol- 
lowing new section: 

"§ 116A. Negotiated licenses for public perform- 
ances by means of coin-operated phonorecord 
players 

"(a) Applicability of Section.— This sec- 
tion applies to any nondramatic musical 
work embodied in a phonorecord. 

"(b) Limitation on Exclusive Right if 
Licenses Not Negotiated.— 

"(1) Applicability.— In the case of a work 
to which this section applies, the exclusive 
right under clause (4) of section 106 to per- 
form the work publicly by means of a coin- 
operated phonorecord player is limited by 
section 116 to the extent provided in this 
section. 

"(2) Determination by copyright royal- 
ty tribunal.— The Copyright Royalty Tri- 
bunal, at the end of the 1-year period begin- 
ning on the effective date of the Berne Con- 
vention Implementation Act of 1988, and pe- 
riodically thereafter to the extent necessary 
to carry out subsection (f), shall determine 
whether or not negotiated licenses author- 
ized by subsection (c) are in effect so as to 
provide permission to use a quantity of mu- 
sical works not substantially smaller than 
the quantity of such works performed on 
coin-operated phonorecord players during 
the 1-year period ending on the effective 
date of that Act. If the Copyright Royalty 
Tribunal determines that such negotiated li- 
censes are not so in effect, the Tribunal 
shall, upon making the determination, pub- 
lish the determination in the Federal Regis- 
ter. Upon such publication, section 116 shall 
apply with respect to musical works that are 
not the subject of such negotiated licenses. 
"(c) Negotiated Licenses.— 
"(1) Authority for negotiations.— Any 
owners of copyright in works to which this 
section applies and any operators of coin-op- 
erated phonorecord players may negotiate 
and agree upon the terms and rates of roy- 
alty payments for the performance of such 
works and the proportionate division of fees 
paid among copyright owners, and may des- 



ignate common agents to negotiate, agree 
to, pay, or receive such royalty payments. 

"(2) Arbitration.— Parties to such a nego- 
tiation, within such time as may be specified 
by the Copyright Royalty Tribunal by regu- 
lation, may determine the result of the ne- 
gotiation by arbitration. Such arbitration 
shall be governed by the provisions of title 
9, to the extent such title is not inconsistent 
with this section. The parties shall give 
notice to the Copyright Royalty Tribunal of 
any determination reached by arbitration 
and any such determination shall, as be- 
tween the parties to the arbitration, be dis- 
positive of the issues to which it relates. 

"(d) License Agreements Superior to 
Copyright Royalty Tribunal Determina- 
tions.— License agreements between one or 
more copyright owners and one or more op- 
erators of coin-operated phonorecord play- 
ers, which are negotiated in accordance with 
subsection (c), shall be given effect in lieu of 
any otherwise applicable determination by 
the Copyright Royalty Tribunal. 

"(e) Negotiation Schedule.— Not later 
than 60 days after the effective date of the 
Berne Convention Implementation Act of 
1988, if the Chairman of the Copyright 
Royalty Tribunal has not received notice, 
from copyright owners and operators of 
coin-operated phonorecord players referred 
to in subsection (c)(1), of the date and loca- 
tion of the first meeting between such copy- 
right owners and such operators to com- 
mence negotiations authorized by subsec- 
tion (c), the Chairman shall announce the 
date and location of such meeting. Such 
meeting may not be held more than 90 days 
after the effective date of such Act. 

"(f) Copyright Royalty Tribunal To 
Suspend Various Activities.— The Copy- 
right Royalty Tribunal shall not conduct 
any ratemaking activity with respect to 
coin-operated phonorecord players unless, 
at any time more than one year after the ef- 
fective date of the Berne Convention Imple- 
mentation Act of 1988, the negotiated li- 
censes adopted by the parties under this 
section do not provide permission to use a 
quantity of musical works not substantially 
smaller than the quantity of such works 
performed on coin-operated phonorecord 
players during the one-year period ending 
on the effective date of such Act. 

"(g) Transition Provisions; Retention 
of Copyright Royalty Tribunal Jurisdic- 
tion.— Until such time as licensing provi- 
sions are determined by the parties under 
this section, the terms of the compulsory li- 
cense under section 116, with respect to the 
public performance of nondramatic musical 
works by means of coin-operated phonorec- 
ord players, which is in effect on the day 
before the effective date of the Berne Con- 
vention Implementation Act of 1988, shall 
remain in force. If a negotiated license au- 
thorized by this section comes into force so 
as to supersede previous determinations of 
the Copyright Royalty Tribunal, as provid- 
ed in subsection (d), but thereafter is termi- 
nated or expires and is not replaced by an- 
other licensing agreement, then section 116 
shall be effective with respect to musical 
works that were the subject of such termi- 
nated or expired licenses."; and 

(b) Technical Amendments.— ( 1 ) Section 
116 is amended— 

(A) by amending the section heading to 
read as follows: 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28299 



"§ 116. Scope of exclusive rights in nondramatic 
musical works: Compulsory licenses for public 
performances by means of coin-operated pho- 
norecord players"; 

(B) in subsection (a) in the matter preced- 
ing paragraph (1), by inserting after "in a 
phonorecord," the following: "the perform- 
ance of which is subject to this section as 
provided in section 116A,"; and 

(C) in subsection (e), by inserting "and 
section 116A" after "As used in this sec- 
tion". 

(2) The table of sections at the beginning 
of chapter 1 is amended by striking out the 
item relating to section 116, and inserting in 
lieu thereof the following: 
"116. Scope of exclusive rights in nondrama- 
tic musical works: Compulsory 
licenses for public perform- 
ances by means of coin-operat- 
ed phonorecord players. 
"116A. Negotiated licenses for public per- 
formances by means of coin-op- 
erated phonorecord players.". 

SEC. 5. RECORDATION. 

Section 205 is amended— 

(1) by striking out subsection (d); and 

(2) by redesignating subsections (e) and (f ) 
as subsections (d) and (e), respectively. 

SEC. 6. PREEMPTION WITH RESPECT TO OTHER 
LAWS NOT AFFECTED. 

Section 301 is amended by adding at the 
end thereof the following: 

"(e) The scope of Federal preemption 
under this section is not affected by the ad- 
herence of the United States to the Berne 
Convention or the satisfaction of obliga- 
tions of the United States thereunder.". 

SEC. 7. NOTICE OF COPYRIGHT. 

(a) Visually Perceptible Copies.— Section 
401 is amended— 

(1) in subsection (a), by amending the sub- 
section heading to read as follows: 

"(a) General Provisions.—"; 

(2) in subsection (a), by striking out "shall 
be placed on all" and inserting in lieu there- 
of "may be placed on"; 

(3) in subsection (b), by striking out "The 
notice appearing on the copies" and insert- 
ing in lieu thereof "If a notice appears on 
the copies, it"; and 

(4) by adding at the end the following: 
"(d) Evidentiary Weight of Notice.— If a 

notice of copyright in the form and position 
specified by this section appears on the pub- 
lished copy or copies to which a defendant 
in a copyright infringement suit had access, 
then no weight shall be given to such a de- 
fendant's interposition of a defense based 
on innocent infringement in mitigation of 
actual or statutory damages, except as pro- 
vided in the last sentence of section 
504(c)(2).". 

(b) Phonorecords of Sound Recordings.— 
Section 402 is amended— 

(1) in subsection (a), by amending the sub- 
section heading to read as follows: 

"(a) General Provisions.—"; 

(2) in subsection (a), by striking out "shall 
be placed on all" and inserting in lieu there- 
of "may be placed on"; 

(3) in subsection (b), by striking out "The 
notice appearing on the phonorecords" and 
inserting in lieu thereof "If a notice appears 
on the phonorecords, it"; and 

(4) by adding at the end thereof the fol- 
lowing new subsection: 

"(d) Evidentiary Weight of Notice.— If a 
notice of copyright in the form and position 
specified by this section appears on the pub- 
lished phonorecord or phonorecords to 
which a defendant in a copyright infringe- 
ment suit had access, then no weight shall 



be given to such a defendant's interposition 
of a defense based on innocent infringement 
in mitigation of actual or statutory dam- 
ages, except as provided in the last sentence 
of section 504(c)(2).". 

(c) Publications Incorporating United 
States Government Works.— Section 403 is 
amended to read as follows: 

"Sections 401(d) and 402(d) shall not 
apply to a work published in copies or phon- 
orecords consisting predominantly of one or 
more works of the United States Govern- 
ment unless the notice of copyright appear- 
ing on the published copies or phonorecords 
to which a defendant in the copyright in- 
fringement suit had access includes a state- 
ment identifying, either affirmatively or 
negatively, those portions of the copies or 
phonorecords embodying any work or works 
protected under this title.". 

(d) Notice of Copyright; Contributions 
to Collective Works.— Section 404 is 
amended— 

(1) in subsection (a), by striking out "to 
satisfy the requirements of sections 401 
through 403", and inserting in lieu thereof 
"to invoke the provisions of section 401(d) 
or 402(d), as applicable"; and 

(2) in subsection (b), by striking out 
"Where" and inserting in lieu thereof "With 
respect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
where". 

(e) Omission of Notice.— Section 405 is 
amended— 

(1) in subsection (a), by striking out "The 
omission of the copyright notice prescribed 
by" and inserting in lieu thereof "With re- 
spect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
the omission of the copyright notice de- 
scribed in"; 

(2) in subsection (b), by striking out 
"omitted," in the first sentence and insert- 
ing in lieu thereof "omitted and which was 
publicly distributed by authority of the 
copyright owner before the effective date of 
the Berne Convention Implementation Act 
of 1988,"; and 

(3) by amending the section heading to 
read as follows: 
"§ 405. Notice of copyright: Omission of notice on 

certain copies and phonorecords" 
(f) Error in Name or Date.— Section 406 
is amended— 

(1) in subsection (a) by striking out 
"Where" and inserting in lieu thereof "With 
respect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
where"; 

(2) in subsection (b) by inserting "before 
the effective date of the Berne Convention 
Implementation Act of 1988" after "distrib- 
uted"; 

(3) in subsection (c)— 

(A) by inserting "before the effective date 
of the Berne Convention Implementation 
Act of 1988" after "publicly distributed"; 
and 

(B) by inserting after "405" the following: 
"as in effect on the day before the effective 
date of the Berne Convention Implementa- 
tion Act of 1988"; and 

(4) by amending the section heading to 
read as follows: 



"§ 406. Notice of copyright: Error in name or date 
on certain copies and phonorecords". 

(g) Clerical Amendment.— The table of 
sections at the beginning of chapter 4 is 
amended by striking out the items relating 
to sections 405 and 406 and inserting in lieu 
thereof the following: 
"405. Notice of copyright: Omission of 

notice on certain copies and 

phonorecords. 
"406. Notice of copyright: Error in name or 

date on certain copies and 

phonorecords.". 

SEC. 8. DEPOSIT OF COPIES OR PHONORECORDS 
FOR LIBRARY OF CONGRESS. 

Section 407(a) is amended by striking out 
"with notice of copyright". 

SEC. 9. COPYRIGHT REGISTRATION. 

(a) Registration in General.— Section 
408 is amended— 

(1) in subsection (a), by striking out "Sub- 
ject to the provisions of section 405(a), 
such" in the second sentence and inserting 
in lieu thereof "Such"; 

(2) in subsection (c)(2)— 

(A) by striking out "all of the following 
conditions—" and inserting in lieu thereof 
"the following conditions:"; 

(B) by striking out subparagraph (A); and 

(C) by redesignating subparagraphs (B) 
and (C) as subparagraphs (A) and (B), re- 
spectively. 

(b) Infringement Actions.— 

(1) Registration as a prerequisite.— Sec- 
tion 411 is amended— 

(A) by amending the section heading to 
read as follows: 

"§ 411. Registration and infringement actions"; 

(B) in subsection (a) by striking out "Sub- 
ject" and inserting in lieu thereof "Except 
for actions for infringement of copyright in 
Berne Convention works whose country of 
origin is not the United States, and sub- 
ject"; and 

(C) in subsection (b)(2) by inserting ", if 
required by subsection (a)," after "work". 

(2) Table of sections.— The table of sec- 
tions at the beginning of chapter 4 is 
amended by striking out the item relating to 
section 411 and inserting in lieu thereof the 
following: 

"411. Registration and infringement ac- 
tions.". 

SEC. 10. COPYRIGHT INFRINGEMENT AND REME- 
DIES. 

(a) Infringement.— Section 501(b) is 
amended by striking out "sections 205(d) 
and 411," and inserting in lieu thereof "sec- 
tion 411,". 

(b) Damages and Profits.— Section 504(c) 
is amended— 

(1) in paragraph (1)— 

(A) by striking out "$250", and inserting 
in lieu thereof "$500"; and 

(B) by striking out "$10,000", and insert- 
ing in lieu thereof "$20,000"; and 

(2) in paragraph (2)— 

(A) by striking out "$50,000.", and insert- 
ing in lieu thereof "$100,000."; and 

(B) by striking out "$100.", and inserting 
in lieu thereof "$200.". 

SEC. 11. COPYRIGHT ROYALTY TRIBUNAL. 

Chapter 8 is amended— 

(1) in section 801, by adding at the end of 
subsection (b) the following: "In determin- 
ing whether a return to a copyright owner 
under section 116 is fair, appropriate weight 
shall be given to— 

"(i) the rates previously determined by 
the Tribunal to provide a fair return to the 
copyright owner, and 









28300 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



"(ii) the rates contained in any license ne- 
gotiated pursuant to section 116 A of this 
title."; and 

(2) by amending section 804(a)(2)(C) to 
read as follows: 

"(C)(i) In proceedings under section 
801(b)(1) concerning the adjustment of roy- 
alty rates as provided in section 115, such 
petition may be filed in 1990 and in each 
subsequent tenth calendar year, and at any 
time within 1 year after negotiated licenses 
authorized by section 116A are terminated 
or expire and are not replaced by subse- 
quent agreements. 

"(ii) If negotiated licenses authorized by 
section 116A come into force so as to super- 
sede previous determinations of the Tribu- 
nal, as provided in section 116A(d), but 
thereafter are terminated or expire and are 
not replaced by subsequent agreements, the 
Tribunal shall, upon petition of any party 
to such terminated or expired negotiated li- 
cense agreement, promptly establish an in- 
terim royalty rate or rates for the public 
performance by means of a coin-operated 
phonorecord player of nondramatic musical 
works embodied in phonorecords which had 
been subject to the terminated or expired 
negotiated license agreement. Such interim 
royalty rate or rates shall be the same as 
the last such rate or rates and shall remain 
in force until the conclusion of proceedings 
to adjust the royalty rates applicable to 
such works, or until superseded by a new ne- 
gotiated license agreement, as provided in 
section 116A(d).". 

SEC. 12. WORKS IN THE PUBLIC DOMAIN. 

Title 17, United States Code, as amended 
by this Act, does not provide copyright pro- 
tection for any work that is in the public 
domain in the United States. 

SEC. 13. EFFECTIVE DATE; EFFECT ON PENDING 
CASES. 

(a) Effective Date.— This Act and the 
amendments made by this Act take effect 
on the date on which the Berne Convention 
(as defined in section 101 of title 17, United 
States Code) enters into force with respect 
to the United States. 

(b) Effect on Pending Cases.— Any cause 
of action arising under title 17, United 
States Code, before the effective date of 
this Act shall be governed by the provisions 
of such title as in effect when the cause of 
action arose. 

Mr. LEAHY. Mr. President, this is 
an important day for American artists, 
authors, and other creators whose in- 
genuity and imaginativeness is reflect- 
ed in works protected by copyright. It 
is an important day for publishers, 
motion picture studios, computer soft- 
ware firms, and other copyright pro- 
prietors who market the fruits of 
American creativity throughout the 
world. And it is an important day for 
all who are concerned about the pre- 
carious position of American industry 
in world trade. Today, with the pas- 
sage of my bill, S. 1301, we take a giant 
step toward strengthening copyright 
protection for American works, by 
moving toward U.S. adherence to the 
Berne Copyright Convention. 

Recent debates in the Senate on 
trade legislation reflected diverse 
views within this body about trade 
policy. But we all agreed that the over- 
all picture of recurring trade deficits is 
gloomy. 



Fortunately, there are a few bright 
spots in the gloom. Among them, is 
one sector of our economy that con- 
stantly outsells the foreign competi- 
tion and boasts a $1.5 billion trade sur- 
plus. Those who sell American ingenu- 
ity and vision, America's copyright 
community, are setting a standard for 
American industry. 

The world's appetite for American 
books, computer software, records, 
movies, and other copyright materials 
appears to be insatiable. We are the 
world's largest exporter of copyrighted 
works because of the skill, inventive- 
ness, and imagination of American au- 
thors, musicians, filmmakers, and soft- 
ware creativity will continue to flour- 
ish only if we act to preserve the envi- 
ronment that fosters it. 

Too many times we have counted on 
goodwill and fairness in trade rela- 
tions, and too many times we have 
seen American products victimized by 
discriminatory trade practices or plain 
old piracy. 

S. 1301 will enable us to join the 
most prominent and effective mecha- 
nism for defending copyrights in the 
global marketplace: The Berne Con- 
vention for the Protection of Literary 
and Artistic Works. 

For over 100 years, the Berne Con- 
vention has provided the framework 
for international copyright relations 
among nearly all the industrialized 
and developing countries. Today, 79 
nations are members of the Berne 
Convention. Each Berne member 
nation is required to extend to works 
from all other member states the same 
copyright rules it applies to its own 
citizens. Berne also establishes mini- 
mum copyright standards that each 
member must meet. This combina- 
tion—guarantees of equal treatment 
and of high standards— adds up to a 
powerful incentive for fair interna- 
tional trade in copyrighted materials. 

For most of a century, differences 
between U.S. law and Berne Conven- 
tion standards have kept our Nation 
from joining the convention. However, 
in the last two decades, changes in 
American law and in the Berne stand- 
ards have narrowed that gap. S. 1301 
makes the last few changes needed for 
the United States to join Berne. 

When I introduced S. 1301 last May, 
I characterized it as following the min- 
imalist approach. I encouraged my col- 
leagues to make only those changes to 
our laws which are necessary in order 
to comply with Berne. I did not want 
to disrupt the assumptions now gov- 
erning relations among creators, pub- 
lishers, distributors, and consumers of 
copyrighted works. 

The best illustration of my minima- 
list approach is in the area of moral 
rights. I believe Congress should reex- 
amine the protections afforded Ameri- 
can artists by current law to prevent 
improper alterations of their works. 
Some argued that we should use this 



legislation as a vehicle for that initia- 
tive. At the same time, others urged us 
to take this opportunity to freeze the 
development of our law in this area. 
But, after studying this question, I 
became convinced of two things. First, 
no change in our law on artists' rights 
is needed to meet Berne's standards. 
Second, the debate over this issue 
would not have advanced the vital goal 
of Berne adherence, which is the only 
object of this legislation. I am glad 
that my colleagues in the Senate and 
the House agreed that the only way 
the United States could join Berne 
this Congress was to leave the moral 
rights debate for another day. 

The measure before us also reflects 
the principles underlying my original 
bill on the question of copyright for- 
malities. Berne forbids the govern- 
ments of member states from imposing 
formalities as conditions of "the en- 
joyment and the exercise" of copy- 
right. I have consistently maintained 
that the requirement of copyright reg- 
istration as a precondition to any law- 
suit to enforce copyright is a formality 
prohibited by Berne. This view is sup- 
ported by most American and Europe- 
an copyright experts who have exam- 
ined the question in depth. The meas- 
ure before us, representing a consen- 
sus among the principal Senate spon- 
sors, is fully consistent with this ap- 
proach. It makes the minimal change 
needed to overcome this obstacle to 
Berne adherence, by excepting only 
works originating in other Berne coun- 
tries from the registration prerequi- 
site. In the view of the Judiciary Com- 
mittee, as reflected in our report on S. 
1301, this is what Berne requires us to 
do; but this is all that Berne requires 
us to do with respect to this formality. 
The approach reflected in the meas- 
ure before us is workable, and sends 
the right message to current and po- 
tential Berne members who may be 
tempted to erect registration barriers 
to enforcement of copyright in Ameri- 
can works. I believe that it also satis- 
fies the concerns of the Library of 
Congress about the possible detrimen- 
tal effect on the Library's collection of 
a flat repeal of the registration pre- 
requisite. I do not expect this bill to 
harm the Library's acquisition efforts 
in any way, for the reasons stated in 
the report accompanying S. 1301. 
However, if the Library demonstrates 
that the changes to the registration 
requirement have some unanticipated 
detrimental impact on acquisitions, I 
will work with the Library to correct 
the problem. 

The measure before us also contains 
several minor technical and clarifying 
amendments to S. 1301 as reported by 
the Judiciary Committee. I ask unani- 
mous consent that my detailed analy- 
sis of the measure be printed in the 
Record at the conclusion of these re- 
marks. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28301 



Mr. President, Berne membership is 
vital to U.S. interests. In the world 
marketplace of the 21st century, copy- 
rights and other intellectual property 
will play a leading role. Explosive de- 
velopments in technology— the office 
copier, the computer, the video record- 
er—foster new forms of creativity and 
advance American business every day. 
America's reliance on these technol- 
ogies is one of the reasons that a wide 
range of American industry supports 
our efforts to join Berne, including 
many firms not usually involved in 
copyright legislation. During our hear- 
ings, representatives of IBM, Pfizer, 
Inc., and other companies testified in 
support of Berne adherence. The 
Senate report contains the name of 
over 80 business groups and individual 
companies that support the action the 
Senate is taking today. 

Finally, Mr. President, I would like 
to express my appreciation to the 
chairman and ranking member of the 
Patents, Copyrights and Trademarks 
Subcommittee, Senators DeConcini 
and Hatch. They have worked long 
and hard to fashion a consensus bill 
that fine tunes our copyright law and 
makes those changes necessary for us 
to join Berne. I would also like to 
thank my friend from the other body, 
Representative Robert Kastenmeier. 
Under this leadership, the House Judi- 
ciary Subcommittee on Courts, Civil 
Liberties and the Administration of 
Justice compiled a valuable hearing 
record that greatly assisted us in our 
deliberations. And as the principal 
House sponsor of Berne implementing 
legislation, he contributed many valu- 
able ideas that are reflected in the 
measure before us today. In addition, 
the hard work and perseverance of 
several dedicated Senate staffers has 
helped to make Berne adherence a re- 
ality. I would note particularly the 
contributions of my own staff, Steve 
Metalitz and Matt Gerson; Randy 
Rader who was sworn in as a judge of 
the U.S. Claims Court last week after 
working for many years for Senator 
Hatch; Ed Baxter with Senator 
DeConcini; Diana Huffman with Sen- 
ator Biden. Let me also thank Chair- 
man Rodino and Chairman Kasten- 
meier and members of their staff, 
Ginny Sloan, Mike Remington, and 
David Beier for their hard work in the 
House on this important legislation. 

Mr. President, I urge the Senate to 
pass the Berne Convention Implemen- 
tation Act of 1988. I call on the House 
of Representatives to act promptly on 
this legislation so that it can be signed 
by the President as soon as possible. I 
note also that the resolution of ratifi- 
cation of the treaty establishing the 
Berne Convention has been reported 
favorably by the Committee on For- 
eign Relations, and is now pending on 
the Executive Calendar. I look for- 
ward to speedy Senate approval of this 
resolution, which will complete the 



process of bringing the United States 
into full participation in the world 
copyright system of the decades 
ahead. 

Mr. President, I yield to the distin- 
guished Senator from Arizona. 

The PRESIDING OFFICER (Mr. 
Breaux). The Senator from Arizona is 
recognized. 

Mr. DeCONCINI. Mr. President, I 
thank the Senator from Vermont for 
his leadership in this endeavor. He ini- 
tiated this process in the last Congress 
and very successfully has brought this 
legislation a long distance. 

Mr. President, I rise today in sup- 
port of S. 1301, a bill to provide for ad- 
herence by the United States to the 
Berne Convention for the Protection 
of Literary and Artistic Works. S. 1301 
will bring the United States into the 
mainstream of international copyright 
law and will help assure U.S. citizens 
of protection of their copyright inter- 
ests by most foreign nations. 

As chairman of the Subcommittee 
on Patents, Copyrights and Trade- 
marks, I heard extensive testimony 
concerning both the benefits and 
drawbacks associated with the adher- 
ence to the Berne Convention. From 
these hearings, I have concluded that 
adherence to Berne will greatly bene- 
fit the United States. 

The Berne Convention was adopted 
over 100 years ago and currently has 
over 75 member nations. Berne pro- 
vides the guidelines which govern the 
copywright relations between member 
nations. The specific provisions in 
Berne are designed to assure that the 
member nations grant nationals of 
other nations the same level of copy- 
right protection provided to the mem- 
bers' own citizens. Although Berne has 
been the most important multilateral 
agreement governing international 
copyright policy, the United States 
has failed to join Berne, and has in- 
stead been concerned with domestic 
copyright laws. 

As an alternative to Berne, the 
United States helped create the Uni- 
versal Copyright Convention in 1954. 
The UCC was designed to protect the 
copyright interest of American artists 
throughout the world. However, the 
treaty obligations under the UCC are 
general, and have not proven suffi- 
cient to protect our interests abroad. 
The United States does not occupy a 
strong position in international copy- 
right matters. It is time to strengthen 
copyright protection for artists from 
the United States. 

There are several reasons why ad- 
herence to the Berne Convention will 
benefit the United States. Initially, ad- 
herence would establish copyright re- 
lations between the United States and 
24 countries with which the United 
States currently has no copyright rela- 
tions. This will provide a consistent 
basis upon which to build a copyright 
relationship. By establishing relations 



with these countries, the United 
States will assure itself of the opportu- 
nity to participate effectively in the 
establishment and management of 
international copyright policy. 

Second, adherence to the Berne Con- 
vention would eliminate the need for 
U.S. copyright holders to employ the 
so-called back-door procedure for gain- 
ing copyright protection in Berne Con- 
vention nations. Currently, under pro- 
visions of the Berne Convention, the 
works of authors of non-Berne nations 
can be protected in member countries 
if the works are published simulta- 
neously in the Berne nations. Recog- 
nizing the need to protect themselves 
from foreign copyright infringement, 
many larger scale producers have uti- 
lized this back-door provision. Howev- 
er, this process can be difficult and ex- 
pensive, and there has been confusion 
over the definition of "simultaneous- 
ly" in some nations. Adherence to 
Berne would save American authors 
from the expense and uncertainty at- 
tached to this back-door procedure by 
allowing for immediate protection in 
member nations. 

Adherence to the Convention would 
also strengthen U.S. trade policy. Rep- 
resentative Kastenmeier stated in his 
testimony before the subcommittee, 
and I quote: 

The relationship of Berne adherence to 
promotion of U.S. trade improvement is 
clear. Our popular culture and information 
products have become a precious export 
commodity of immense economic value. 
That value is badly eroded by international 
copyright piracy. Berne standards are both 
high, reasonable and widely accepted inter- 
nationally. Lending our prestige and power 
to the international credibility of those 
standards will promote development of ac- 
ceptable copyright regimes in bilateral and 
multilateral contexts. 

In addition to strengthening our 
trade policy, the United States has 
sought to formulate an intellectual 
property code within the General 
Agreement on Tariffs and Trade. A 
consistent, reliable copyright policy is 
crucial for any property code that 
would include a section on copyrights. 
Berne Convention adherence will 
also help assure that the works of art- 
ists in the United States are effective- 
ly protected against piracy in foreign 
nations. It is clear that the works of 
U.S. artists are being exploited around 
the world. The subcommittee heard 
compelling testimony from various 
sources, describing the piracy taking 
place in foreign markets. The Under 
Secretary for Economic Affairs, Allen 
Wallis, testified that a 1985 study 
showed that piracy from only 10 coun- 
tries cost U.S. industry 1.3 billion in 
lost sales annually. 

We have consulted with several foreign 
governments whose copyright policies were 
causing serious economic harm to U.S. copy- 
right interests and pointed out the principal 
elements of a good copyright law which 
would provide "adequate and effective" pro- 







28302 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



tection for copyrighted works. During this 
exercise it has become clear that the provi- 
sions of Berne are the best standard on 
which to base that protection. 

The U.S. failure to join Berne has 
made it more difficult for U.S. authors 
to gain protection against foreign pi- 
rates. An example of this difficulty 
can be found in Thailand, where, ac- 
cording to the Judiciary Committee 
report, Thai officials have reportedly 
pointed out the inconsistency in the 
United States position of trying to per- 
suade the Thai Government to combat 
piracy, while at the same time the 
United States refuses to join Berne 
and work for further cooperation in 
the copyright area. 

Mr. President, it is clear that adop- 
tion of the Berne Convention will ben- 
efit the United States in the areas I 
have discussed. There has been con- 
cern regarding the effect of compli- 
ance on existing and future copyright 
law. Let me take a moment to address 
the legitimate concerns raised by the 
provisions of the Berne Convention. 

First, it is important to note that the 
provisions of the Berne Convention 
are not self-executing. This means the 
provisions are not directly enforceable 
in U.S. courts; instead, the private 
rights exist only to the extent provid- 
ed for by U.S. law. Therefore, Berne 
will not allow foreign authors to assert 
rights superior to those afforded U.S. 
authors under U.S. law. 

Another area of concern has been 
article 5(2) of the Berne Convention 
which states that "the enjoyment and 
the exercise of [copyright] shall not 
be subject to any formality." For 
many years, this provision was be- 
lieved to be an absolute bar to U.S. 
compliance with Berne, because do- 
mestic U.S. copyright law has tradi- 
tionally required formalities such as 
the copyright registration. However, 
the 1976 copyright law helped bridge 
the gap between U.S. law and the pro- 
visions of Berne. Today, the majority 
of experts believe that current U.S. 
copyright law requiring mandatory 
copyright registration conflicts with 
this provision of Berne. S. 1301 re- 
solves this conflict by creating a two- 
tier registration system under domes- 
tic copyright law. It does this by elimi- 
nating the mandatory registration re- 
quirement for foreign copyrights, re- 
placing it with a voluntary registration 
system. After a careful study, the Ju- 
diciary Committee concluded that the 
modification of the registration re- 
quirement would not prove detrimen- 
tal in enforcing copyright laws. The 
use of the voluntary system for for- 
eign copyright holders does provide in- 
centives for registration under domes- 
tic copyright law. These incentives 
would allow foreign copyright holders 
to prove the existence of their copy- 
right, and discourage frivolous law- 
suits. Thus, U.S. law regarding for- 
malities can be brought within the 



boundaries specified by Berne without 
disrupting the existing structure of 
U.S. copyright law. 

Perhaps the greatest area of concern 
surrounding Berne comes in the area 
of moral rights. Article 6bis of the 
Berne Convention requires the recog- 
nition that "the author shall have the 
right to claim authorship of the work 
and to object to any distortion, mutila- 
tion or other modification of, or other 
derogatory action in relation to, the 
said work, which would be prejudicial 
to his honor or reputation." There has 
been debate as to whether these moral 
rights already exist under U.S. laws, or 
whether new laws must be created en- 
suring these rights to artists before 
the U.S. law can become compatible 
with Berne. The subcommittee heard 
testimony from concerned artists such 
as Steven Spielberg asking for greater 
protection; it also heard from parties 
such as Donald Kummerfeld of the 
Magazine Publishers of America, who 
believed that adoption of the Berne 
Convention moral rights provisions 
would prove disastrous to the periodi- 
cal and other industries. After careful 
consideration, the committee report 
concluded that protection adequate to 
conform to Berne is provided for 
under existing laws. These existing 
U.S. laws include various provisions of 
the Copyright Act and Lanham Act, 
various State statutes, and common 
law principles such as libel, defama- 
tion, misrepresentation, and unfair 
competition. All of these existing laws 
have been applied by courts to redress 
authors for injuries suffered as a 
result of the violation of their moral 
rights. Application of U.S. law in the 
area of moral rights has struck the 
proper balance between the rights of 
artists and industry. 

Mr. President, the time has come for 
the United States to join the 20th cen- 
tury in the area of international copy- 
right law. The Berne Convention 
offers the opportunity to allow for 
greater protection of U.S. copyright 
interests, while at the same time es- 
tablishing a solid U.S. role in interna- 
tional copyright affairs. I hope that 
my colleagues will join me in support 
of this worthwhile measure. 

Finally, I thank my distinguished 
colleague, Senator Leahy. He has la- 
bored a long time on this effort. It has 
taken an immense amount of patience, 
persistence, and hard work to get this 
bill where it is today. His foresight and 
patience have really been the key to 
our success here today. 

Also, I thank my distinguished col- 
league from Utah, Senator Hatch, 
who has been instrumental in the for- 
mulation of this legislation. As the 
ranking minority member of the sub- 
committee, Senator Hatch cooperated 
immensely in making this a successful 
bipartisan effort. 

I also thank the Senator from Mis- 
sissippi, Senator Cochran, who has a 



very unique interest which he is going 
to discuss later. I share his concern 
and assure him that if I am again 
chairman of this subcommittee, we 
will address in all earnestness the par- 
ticular area of his interest. He was 
very cooperative in permitting us to 
bring up this bill. 

I thank the many staff members of 
the Judiciary Committee who labored 
long and hard: Matt Gerson; Steve 
Metalitz; Randy Rader, who is no 
longer with us; Abby Kuzma; Ed 
Baxter, my chief counsel, who has put 
in a tremendous amount of time and 
effort here; and Joe Kreamer. 

I yield the floor. 

The PRESIDING OFFICER. The 
Senator yields the floor. 

The Senator from Vermont. 

Mr. LEAHY. Mr. President, I com- 
mend the distinguished Senator from 
Arizona for his work as chairman of 
the subcommittee. If we had not had 
his cooperation, leadership, and effort, 
we could not be at this point. 

Mr. President, I ask unanimous con- 
sent to have printed in the Record a 
joint explanatory statement on the 
Leahy-DeConcini-Hatch amendment 
to S. 1301. 

There being no objection, the state- 
ment was ordered to be printed in the 
Record, as follows: 

Joint Explanatory Statement on 
Amendment to S. 1301 

The Leahy-DeConcini-Hatch amendment 
to S. 1301 makes one principal substantive 
change to the bill as reported by the Senate 
Judiciary Committee. It also makes minor 
clarifying, technical and corrective amend- 
ments. Full discussion of the portions of the 
bill not amended by this amendment may be 
found in Senate Report 100-352. 

The principal change made by the amend- 
ment deals with existing section 411 of the 
Copyright Act, 17 USC 411. This provision 
establishes the general rule that a claim of 
copyright in a work must be registered with 
the Copyright Office before any lawsuit 
claiming infringement of the work may be 
initiated. Section 411(a) contains an excep- 
tion in the case of a work as to which the 
Copyright Office has refused to issue a cer- 
tificate of registration, but the fact remains 
that a review by the Copyright Office of the 
validity of a copyright claim is a necessary 
precondition for enforcement of copyright 
protection under current law. 

The Senate Judiciary Committee conclud- 
ed that existing section 411 is incompatible 
with Article 5(2) of the Berne Convention, 
which states a principle that has been cen- 
tral to Berne almost since its inception: that 
"the enjoyment and the exercise of [copy- 
right] shall not be subject to any formali- 
ty." The Committee agreed with the view 
espoused by most experts who studied the 
question: the registration prerequisite estab- 
lished by section 411 is a formality prohibit- 
ed by Berne. Accordingly, S. 1301, both as 
introduced and as reported by the Commit- 
tee, eliminated the requirement of registra- 
tion as a prerequisite to an infringement 
action. The Committee was convinced that 
the other, Berne-compatible, incentives for 
timely registration— including the prima 
facie evidentiary effect of registration, and 
the availability of statutory damages and at- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28303 



torneys' fees only in the case of successful 
infringement actions with respect to regis- 
tered works— as strengthened by a doubling 
of statutory damages, were fully adequate 
to assure that the vase majority of works, 
whatever their provenance, would continue 
to be registered. 

However, as the Committee noted in its 
report, the question before it was "whether 
the registration provisions of existing U.S. 
copyright law, as applied to foreign works 
originating in states adhering to Berne, con- 
stitute a prohibited formality. . . ." S. Rept. 
100-352, at 13 (emphasis added). Berne does 
not restrict member nations from imposing 
formalities on works of domestic origin. 

In other words, the elimination of section 
411(a), as S. 1301 provides, is not, strictly 
speaking, the most minimal change that 
may be made in the Copyright Act in order 
to comply with Berne. All Berne requires is 
the elimination from U.S. law of formalities 
applicable to works originating in Berne 
countries other than the United States. 

Following the Senate Judiciary Commit- 
tee's approval of S. 1301, discussions contin- 
ued among Senate and House staff, with 
expert assistance from the Copyright Office 
and copyright practitioners from the private 
sector. The goal was to craft a compromise 
on the issue of copyright registration, be- 
tween the Senate's proposed elimination of 
the registration prerequisite contained in 
section 411, and the conclusion embodied in 
the House bill (H.R. 4262) that Berne re- 
quired no change in that section. 

The fruit of those discussions is embodied 
in the amendment to S. 1301 now before the 
Senate. It establishes a so-called "two-tier" 
system with respect to the requirements of 
section 411. Works whose country of origin 
is a foreign nation adhering to the Berne 
Convention are exempt from the registra- 
tion prerequisite; infringement suits may be 
brought with respect to such works even if 
they have never been submitted for registra- 
tion with the Copyright Office. All other 
works remain subject to existing section 
411(a). 

The amendment accomplishes four goals 
important to the effort to bring the United 
States into the Berne Convention. 

First, it is fully consistent with the posi- 
tion embodied in S. 1301 as reported, which 
concludes that the registration prerequisite 
is a formality imposed on "the enjoyment 
and the exercise" of copyright, within the 
meaning of Article 5(2) of Berne. It thus 
avoids creating the undesirable precedent 
that would buttress other current or poten- 
tial Berne adherents in arguing that they 
may impose truly onerous registration re- 
quirements on foreign works, including 
works of U.S. origin, without offending 
Berne standards. 

Second, it establishes a workable test for 
determining which works may be the sub- 
ject of infringement actions without prior 
registration with the Copyright Office. The 
amendment includes a provision clearly de- 
fining the circumstances under which the 
country of origin of a Berne Convention 
work is and is not the United States. This 
definitional provision tracks the definition 
of "country of origin" found in Article 5(4) 
of Berne. 

This test is, of course, not as easy for the 
courts to apply as the corresponding provi- 
sion of S. 1301 as reported. Under the com- 
mittee-reported bill, the presence or absence 
of a registration certificate would be irrele- 
vant to a plaintiff's right to sue for infringe- 
ment, although of course the absence of a 
certificate would still have highly signifi- 



cant consequences for the plaintiff's ease of 
proof and for the relief the plaintiff could 
obtain. However, the amendment seeks to 
create the simplest possible two-tier system, 
in order to minimize the potential for dis- 
putes over whether or not registration is a 
prerequisite to a given lawsuit. Further- 
more, since those cases in which registration 
is not a prerequisite to an infringement law- 
suit are defined as an exception to the rule 
contained in section 411(a), it is the plain- 
tiff's responsibility to plead and prove that 
his or her case comes within the exception 
for works originating in a foreign country 
adhering to Berne. It would remain the 
case, as contemplated by the Senate report, 
that copyright claimants would have strong 
business and legal incentives to register 
their claims to copyright protection in virtu- 
ally every instance. However, the court- 
house door would no longer be barred to 
any claimant who can demonstrate that the 
unregistered work he seeks to protect is one 
as to which registration is not required as a 
precondition of suit. 

Third, this amendment further minimizes 
the policy objection asserted to the Commit- 
tee-reported bill: that modification of the 
registration prerequisite will degrade the 
quality of the registration system and 
hamper the acquisition activities of the Li- 
brary of Congress. While the Committee 
considered these concerns and rejected 
them as exceedingly unlikely to become re- 
ality (see S. Rept. 100-352 at 19-23), they 
appear even more unfounded under the 
amended version of the bill. The Copyright 
Office estimates that 95 percent of all regis- 
trations are made with respect to domestic 
works, a category which largely overlaps 
with the tier of works of United States 
origin as defined by this amendment. For 
these works, the incentives for registration 
are substantially increased, not decreased, 
by this bill, which maintains the registra- 
tion prerequisite for infringement suits with 
respect to works of United States origin, and 
also doubles the statutory damages avail- 
able to redress infringement. As the Com- 
mittee report notes, "there is no basis for 
assuming that foreign publishers will be less 
eager to protect their works against in- 
fringement in this country than are domes- 
tic publishers." S. Rept. 100-352, at 23. 
Thus, while the Copyright Office advised 
the Congressional Budget Office that it an- 
ticipated a 5 to 10 percent decrease in the 
number of works registered if section 411(a) 
were repealed for all works, id. at 50, that 
estimate, even if valid, must be decreased by 
roughly 95 percent in light of the provisions 
of this amendment, which leave roughly 
that percentage of registrations unaffected. 
This calculation yields an estimated de- 
crease in registrations of between one-quar- 
ter and one-half of one percent per annum. 
A registration dropoff of this small order of 
magnitude is unlikely to have any discerni- 
ble effect either on the quality of the regis- 
try of works compiled by the Copyright 
Office, or on the ability of the Library of 
Congress to acquire works through registra- 
tion deposit. 

Finally, the two-tier system for registra- 
tion embodied in this amendment achieves 
the goal of a reasonable compromise be- 
tween the House and Senate positions on 
this question. It is anticipated that this 
compromise is fully acceptable to the 
House, and that the last remaining signifi- 
cant point of controversy between the 
bodies is thereby eliminated. In the view of 
the sponsors of this amendment, this con- 
sideration fully overcomes the reservations 



about a two-tier system which were pointed 
out by some of the witnesses before the 
Committee, and which led the Committee to 
reject a two-tier solution in favor of a simple 
elimination of section 411(a) as it currently 
exists. 

The creation of a two-tier system with re- 
spect to the registration prerequisite of sec- 
tion 411(a) is not, and should not be regard- 
ed as, a precedent for establishing two- 
tiered approaches to any other area of copy- 
right law in which the United States theo- 
retically remains free, even after adherence 
to Berne, to treat copyright works different- 
ly based on their country of origin. In these 
other areas, a two-tiered approach might 
well be more complex to administer, and is 
completely unnecessary to avoid the estab- 
lishment of potentially undesirable prece- 
dents with respect to interpretation of the 
Berne Convention. 

With regard to the specifics of the amend- 
ment on registration, the two-tier system is 
established by making three amendments to 
the committee-reported bill. First, the 
repeal of existing section 411(a) is eliminat- 
ed, in favor of an introductory phrase to the 
existing provision which makes it inapplica- 
ble to "actions for infringement of copy- 
right in Berne Convention works whose 
country of origin is not the United States." 
Secondly, in section 411(b), dealing with 
works such as live broadcasts that are first 
fixed simultaneously with transmission, the 
amendment inserts after the reference to 
post-broadcast registration of the work the 
phrase 'if required by subsection (a)." Final- 
ly, the amendment inserts in the definition- 
al section of the Copyright Act, 17 USC 101, 
a definition of "country of origin" of a 
Berne Convention work. 

The definition of country of origin, while 
a new feature of U.S. copyright law, is a fa- 
miliar principle to students of Berne. The 
definition contained in the amendment 
tracks the definition of this phrase con- 
tained in Article 5(4) of Berne. For the guid- 
ance of practitioners, and of the courts, the 
following observations may be in order. 

First, the bill's definition of "country of 
origin" is significant only with respect to 
section 411, and in particular only with re- 
spect to the question of whether an in- 
fringement lawsuit may be brought with re- 
spect to a work which has not been submit- 
ted to the Copyright Office for issuance of a 
certificate of registration. The application 
of the definition of country of origin of a 
work is irrelevant under U.S. law for any 
other purpose. For example, eligibility for 
protection under 17 USC 104 of a work au- 
thored for first published outside the 
United States is to be determined under the 
provisions of that section, not under the 
provisions for determining country of origin 
of a Berne Convention work. Similarly, in 
the case of lawsuits with respects to regis- 
tered works, their country of origin is irrele- 
vant to whether the successful plaintiff may 
recover statutory damages and attorneys' 
fees (see 17 USC 412, 504(c), 505). 

Second, the country of origin of a work is 
significant only for a work which is a Berne 
Convention work, as defined by the bill. 
Thus, for example, a work authored by a na- 
tional of the Soviet Union and first pub- 
lished only in that country does not fulfill 
the definition of a Berne Convention work, 
because the Soviet Union does not adhere to 
the Berne Convention. The work is subject 
to protection under U.S. law (see 17 USC 
104(b)(2)), because the Soviet Union is a 
member of the Universal Copyright Conven- 
tion. But registration remains a prerequisite 



28304 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



to initiation of an infringement action with 
respect to such a work, as specified in sec- 
tion 411(a). because the exception created 
by this bill, as amended, applies only to 
Berne Convention works. Since the country 
of origin of a published work is relevant 
only if the work is a Berne Convention 
work, the test of simulataneous first publi- 
cation set forth in the definition of a Berne 
Convention work is equally applicable to 
the determination of the country of origin 
of a work (i.e., first published in one coun- 
try and published in another country or 
countries within thirty days of such first 
publication.) 

Third, in the case of a Berne Convention 
work, it is not necessary in all cases to deter- 
mine the precise country of origin of the 
work in order to know whether or not the 
registration prerequisite to suit applies. It is 
only necessary to determine whether the 
country of origin is or is not the United 
States. Thus, for example, a work authored 
by a French national, simultaneously first 
published in the United Kingdom and 
Canada, is not subject to the registration 
prerequisite, regardless of whether, under 
the provisions of Berne itself, its country of 
origin might be determined to be France, 
the United Kingdom, or Canada. It is suffi- 
cient that it fulfills the definition of a 
Berne Convention work, and that it cannot 
possibly be a work whose country of origin 
is the United States. 

Fourth, for a published Berne Convention 
work, the situs of first publication deter- 
mines whether or not its country of origin is 
the United States, with one exception. A 
work first published in a foreign nation not 
adhering to the Berne Convention— e.g., the 
Peoples Republic of China— may neverthe- 
less be a Berne Convention work, under pro- 
visions of the committee-reported bill that 
are substantively unchanged by this amend- 
ment, if one or more of its authors is a na- 
tional of a nation adhering to the Berne 
Convention on the date of first publication. 
Such a work is a work of United States 
origin if all of its authors are nationals of 
the United States. In such a case, the regis- 
tration prerequisite must be satisfied. How- 
ever, if one or more of the authors is not a 
U.S. national, the Berne Convention work 
first published in China is not a work of 
United States origin, and the exception to 
section 411(a) applies. 

For all other published Berne Convention 
works, the situs of first publication deter- 
mines whether or not the United States is 
the country of origin. Obviously, works first 
published in the United States are works of 
United States origin. So are works simula- 
taneously first published in the United 
States and in a non-Berne country. Con- 
versely, works first published solely in a for- 
eign Berne member nation are not works of 
United States origin. The country of origin 
of works simultaneously first published in 
the United States and in another Berne 
member nation is determined by reference 
to the term of protection granted by the 
laws of the two nations to the class of work 
in question. If the term of protection grant- 
ed by U.S. law is shorter or the same as the 
term granted by the other nation in ques- 
tion, the work's country of origin is the 
United States. Otherwise, the work's coun- 
try of origin is not the United States. In all 
the instances described in this paragraph, 
the nationality of the author or authors is 
irrelevant to the determination of the coun- 
try or origin. 

Fifth, with respect to unpublished works, 
17 USC 104(a) provides protection under 



U.S. law without regard to the nationality 
of the author, so long as the work remains 
unpublished. If none of the authors is a na- 
tional of a Berne member nation (including 
the United States), the work, while unpub- 
lished, is not a Berne Convention work, and 
therefore the country of origin need not be 
determined; the registration prerequisite for 
initiating an infringement suit applies in 
any event. If one or more of the authors of 
the unpublished work is a national of a 
Berne member nation, the work is a Berne 
Convention work, and the registration pre- 
requisite does not apply unless all the au- 
thors are United States nationals, in which 
case the work's country of origin is the 
United States and the work must be regis- 
tered before suit, as specified in section 
411(a). The definitional provision also incor- 
porates the headquarters test for determin- 
ing the nationality of a legal entity which is 
the author of a published or unpublished 
audiovisual work. 

Sixth, if the work is a pictorial, graphic or 
sculptural work incorporated in a building 
or structure, the work is a Berne Conven- 
tion work (under the definition of that term 
in the committee-reported bill) if the build- 
ing or structure is located in a Berne 
member nation. If the situs of the building 
or structure is the United States, the work 
is of United States origin and must satisfy 
the registration prerequisite for suit. 

Seventh, for every Convention work, the 
country of origin either is or is not the 
United States. Unless a work is shown to be 
a work whose country of origin is not the 
United States, and therefore exempted from 
the requirements of section 411(a), then the 
work's country of origin is the United 
States, and section 411(a) must be satisfied. 
As the factors establishing the non-United 
States origin of the work (whether situs of 
publications or nationally of the author of 
authors) are likely to be peculiarly within 
the knowledge of the copyright claimant, 
and since the exemption for works of non- 
United States origin is an exception to the 
general rule imposing a registration prereq- 
uisite, it is the obligation of the claimant in 
a work in a work not submitted for registra- 
tion to demonstrate the applicability of the 
exception. 

Finally, the amendment leaves unaffected 
the current provisions of section 411(a) with 
respect to works as to which the Copyright 
Office has refused to issue a certificate of 
registration. Like the committee-reported 
bill, it also leaves unaffected the provisions 
granting prime facie evidentiary weight to a 
timely registration certificate, and condi- 
tioning statutory damages and attorneys' 
fees upon timely registration. 

Most of the other changes to the Senate- 
reported bill made by this amendment are 
technical, drafting or clarifying in nature. 
They include the following: 

1. The amendment includes a technical 
provision specifying that amendments to or 
repeals of sections refer to sections of Title 
17 of the United States Code. 

2. The amendment corrects a typographi- 
cal error in the declarations section with re- 
spect to the date of signature of the Berne 
Convention. 

3. The amendment clarifies that the provi- 
sions of Berne may be given effect under, 
inter alia, the provisions of the common 
law. 

4. The provision specifying that certain 
rights (those specified in Article 6bis of 
Berne) claimed under U.S. law shall be nei- 
ther expanded nor reduced by virtue of ad- 
herence to Berne has been redrafted to con- 



form to the language adopted by the House, 
without substantive change. See S. Rept. 
100-352 at 9-10, 38-39. 

5. In the definition of a Berne Convention 
work, the amendment replaces the word 
"State" with "nation." The existing text of 
the Copyright Act uses the term "State" 
(see, e.g., 17 USC 301) in the sense of one of 
the fifty States, and the term is explained 
in 17 USC 101 in the same context. The def- 
inition of a Berne Convention work in the 
committee-reported bill uses "State" in the 
sense of "nation." This amendment should 
prevent any unintended confusion between 
the two terms. 

6. In the same definitional provision, the 
amendment replaces the term "simulta- 
neously published" with "simultaneously 
first published," in order to clarify that the 
situs of first publication, not of some publi- 
cation occurring more than thirty days after 
first publication, is determinative in some 
circumstances of whether a published work 
is a Berne Convention work. See S. Rept. 
100-352, at 40. Once thirty days have 
elapsed since the first publication of a work, 
simultaneous publication in two or more 
countries other than the country of first 
publication is irrelevant to the work's status 
as a Berne Convention work. 

7. In the same definitional provision, the 
paragraph concerning pictorial, graphic or 
sculptural works incorporated in a building 
or other structure has been redrafted to 
clarify that the provision has no application 
to any other pictorial, graphic, or sculptural 
work. See S. Rept. 100-352 at 40. 

8. A drafting change has been included in 
the amendment to section 104 to refer to 
"adherence of the United States" to Berne, 
rather than "United States adherence" 
thereto, to conform the language of this sec- 
tion to that adopted by the House. 

9. The amendment to section 108 of the 
Copyright Act has been eliminated. The 
House bill did not change section 108, which 
deals with the circumstances under which a 
library or archives may reproduce and dis- 
tribute a single copy of a work without in- 
curring liability for infringement. The 
report accompanying S. 1301 indicated that 
retention of the provision in question, sec- 
tion 108(a)(3), which concerns the inclusion 
of a copyright notice on works and parts of 
works reproduced and distributed under the 
authority of this section, might be confus- 
ing in light of the elimination of the notice 
requirement elsewhere in the Copyright 
Act. The sponsors of the amendment are 
persuaded that elimination of the provision 
might be more confusing and potentially 
disruptive of current practices than its re- 
tention, and that elimination of the provi- 
sion is not clearly required in order to meet 
Berne standards. Accordingly, section 
108(a)(3) has been retained. 

10. The provisions of the House and 
Senate bills on jukebox performances of 
nondramatic musical works are virtually 
identical in substance. See S. Rept. 100-352, 
at 41-42. However, as a matter of drafting, 
the committee-reported Senate bill repealed 
the current provisions on this topic, con- 
tained in 17 USC 116, and substituted new 
provisions which contemplate the negotia- 
tion of voluntary licensing agreements with 
respect to such works. The existing system 
of compulsory licensing at rates set by the 
Copyright Royalty Tribunal would have re- 
mained in effect during the one-year transi- 
tional period during which licensing negoti- 
ations will take place, and thereafter in case 
of the lapse or expiration of such licensing 
arrangements. However, under these cir- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28305 



cumstances, jukebox performances would be 
governed by provisions that no longer ap- 
peared in the U.S. Code. The House drafting 
approach retained existing section 116, but 
made it subject to a new section 116A, 
which incorporate the mechanism for the 
recognition of voluntary licensing agree- 
ments. From a practical standpoint, this 
drafting approach, which leaves section 116 
"on the books" for ready reference in cir- 
cumstances in which it may govern, seems 
preferable, and the amendment contains 
the necessary technical and conforming 
amendments to accomplish this. The 
amendment also makes other drafting and 
clarifying changes, as follows: 

(a) The provisions of section 116A (a)(2) 
(in the committee-reported bill, section 116 
(a)(2)) have been redrafted to conform more 
closely to the House language, without sub- 
stantive change. The provisions of section 
116(a)(c)(l) have been redrafted to track 
the House language. The sponsors of the 
amendment agree with the statements in 
the House Report on the generally procom- 
petitive effects of collectively negotiated li- 
censing agreements, see House Report 100- 
609, at 25-26; therefore a specific statutory 
antitrust exemption is unneeded. 

(b) A drafting change in section 116A(g) 
clarifies that the back-up compulsory li- 
cense applies to those works which were the 
subject of expired or terminated voluntary 
licensing agreements prior to such expira- 
tion or termination. 

(c) The definitional provisions of section 
116(h) of the committee-reported bill have 
been eliminated as surplusage. These terms 
are defined in section 116(e) of existing law, 
which is retained under the drafting ap- 
proach embodied in the amendment. 

11. The amendment to the pre-emption 
provision of the Copyright Act, 17 USC 301, 
has been redrafted without substantive 
change to conform more closely to the 
House language. See S. Rept. 100-352, at 43. 

12. The amendment contains minor draft- 
ing changes to section 7, which eliminates 
the mandatory notice requirement and re- 
places it with an incentive for voluntary 
notice. See S. Rept. 100-352, at 43-44. The 
principal clarifying change concerns the 
new sections 401(d) (for works other than 
phonorecords) and 402(d) (for phonore- 
cords). The quotation marks around the 
term "innocent infringement" have been 
eliminated, and a specific reference to sec- 
tion 504(c)(2) has been incorporated from 
the House bill, to clarify that the presence 
of voluntary notice affects only the ability 
of a defendant to seek to mitigate damages 
under the second sentence of 17 USC 
504(c)(2) (dealing with an infringer who was 
not aware and had no reason to believe that 
he was infringing), and not the ability of a 
library, archives, or public broadcasting de- 
fendant to seek remission of damages (as 
provided by the last sentence of 17 USC 
504(c)(2)) under a reasonable belief that the 
fair use provisions of 17 USC 107 applied. 

13. The amendment embodies a compro- 
mise between the House and Senate Com- 
mittee provisions amending chapter 8 of 
Title 17 to accommodate the voluntary li- 
censing regime for jukebox performances. 
The amendment retains the provision of the 
committee-reported bill that specifies fac- 
tors to which the Copyright Royalty Tribu- 
nal (CRT) should give "appropriate 
weight," rather than seeking to bind the 
CRT more closely to these factors (see S. 
Rept. 100-352, at 47-48). However, the first 
such factor has been expanded to include 
not only the most recent CRT determina- 



tions, but all prior CRT determinations, 
since an earlier determination with respect 
to a similar grouping of works may be more 
relevant than the "most recent" determina- 
tion if the latter concerns a grouping of 
works dissimilar to the works at issue when 
the CRT is called upon to set new rates. 
Furthermore, while the directive to the 
CRT to promptly establish an interim rate 
when the back-up compulsory licensing pro- 
cedures are triggered has been retained, the 
authorization to make the finally deter- 
mined rate retroactive to the date of expira- 
tion of voluntary licensing agreements has 
been eliminated, since it is unlikely to be of 
great practical utility. The sponsors antici- 
pate that the interim compulsory license 
rate will, absent unusual circumstances, cor- 
respond to the rate established by the ex- 
pired or terminated negotiated license 
agreement. 

14. In the effective date provision of sec- 
tion 13, the amendment makes a drafting 
change to specify that the Act will take 
effect on the "date on which" the Berne 
Convention enters into force with respect to 
the United States, rather than the "same 
day" as Berne enters into force. This 
amendment clarifies that the changes to 
U.S. law made by this Act take effect simul- 
taneously with the official action that re- 
quires the United States to meet its obliga- 
tions under Berne. In order to further 
insure the simultaneity of these two events, 
the sponsors of the amendment expect that 
the Federal Register notice to be issued by 
the State Department will specify not only 
the date, but also the precise hour, of the 
entry into force of Berne and the coming 
into effect of the amendments made by this 
Act. This procedure would avoid any gap be- 
tween the time U.S. law is changed and the 
time Berne enters into force for the U.S. As 
noted in the Committee report, if such a 
gap occurred, it could create uncertainty 
and inequity, and even give rise to a claim 
that U.S. courts are obligated to enforce 
rights claimed directly under Berne in the 
absence of implementing legislation (see S. 
Rept. 100-352, at 28). 

One of the recurring issues of this legisla- 
tion is the question of self-execution: that 
is, whether adherence to Berne would auto- 
matically cause some changes in our copy- 
right law. Virtually every expert with whom 
the Judiciary Committee has consulted be- 
lieved that the Berne Convention is not self- 
executing. That means that adherence itself 
does not change U.S. copyright law in any 
way. The State Department, Patent and 
Trademark Office, Copyright Office, and 
copyright experts who testified before the 
Senate have assured us that the Berne legis- 
lation is in no way self-executing. See. S. 
Rept. 100-352, at 38. 

Of course, that means that no future revi- 
sions to the Berne Convention will be self- 
executing either. This bill defines the 
"Berne Convention" to include future revi- 
sions of the treaty because, as a Berne 
member, the U.S. may be obligated to pro- 
tect works originating in countries adhering 
to any new revision of Berne, just as we will 
be obligated to protect the works orginating 
in countries that may join the current text 
of Berne after we do. But any revision of 
Berne will have no effect on our substantive 
copyright law. Our copyright law is con- 
trolled by what is written in the United 
States Code, as interpreted by the courts. 
The only way to change our copyright law is 
by an Act of Congress, passed by both 
Houses and signed by the President. Noth- 
ing in this bill changes this principle. 



Mr. LEAHY. Mr. President, Senator 
Hatch, who is the ranking member of 
the committee and Senator Cochran, 
are here. Just so Senators know what I 
would like to do, after those gentle- 
men speak on the bill, we will have a 
voice vote on the amendment, which I 
believe is going to be possible. I would 
then call for third reading on S. 1301 
with a request for the yeas and nays. 
With that, Mr. President, I yield the 
floor. 

The PRESIDING OFFICER. The 
Senator's time has expired. He has 
yielded the floor. 

The Senator from Utah controls 10 
minutes. 

The Senator from Utah is recog- 
nized. 

Mr. HATCH. Mr. President, I want 
to compliment the distinguished Sena- 
tor from Vermont, as well as the dis- 
tinguished Senator from Arizona, for 
the work they have done on this very, 
very important bill. 

The position of the United States in 
worldwide trade and intellectual prop- 
erty negotiations has continually been 
undercut by our failure to participate 
in the Berne Convention for the Pro- 
tection of Literary and Artistic Works. 
The benefits to American artists and 
copyright holders, rather than our 
posture in international negotiations, 
is the primary reason for joining the 
convention. The Berne Convention ex- 
tends copyright protections beyond 
our borders to the worldwide coverage 
provided by the 76 current signatories 
to the multilateral treaty. 

In testimony before the House of 
Representatives on adherence to the 
Berne Convention, the late Secretary 
of Commerce, Malcolm Baldrige, noted 
that copyright industries earned a 
trade surplus of $1.2 billion in 1982. 
This means that the United States, 
more than most signatories to the con- 
vention, has an important stake in 
international copyright protections. 
The United States produces and ex- 
ports a remarkable amount of proper- 
ty protected by copyright. According- 
ly, Secretary Verity appeared before 
the Senate Judiciary Committee to 
highlight the need for membership in 
the Berne Union. He noted that in 
1984 copyright industries lost as much 
as $1.3 billion to piracy in only 10 se- 
lected countries. Once again, this un- 
derscores the stake of the United 
States in the protections for intellec- 
tual property provided by the conven- 
tion. 

As ranking member of the Senate's 
Patents, Copyrights, and Trademarks 
Subcommittee, it has been my pleas- 
ure to meld the efforts of the Reagan 
administration with the expertise of 
the Judiciary Committee in order to 
implement the Berne Convention. At 
the outset of this process, I introduced 
on behalf of the Reagan administra- 
tion, S. 1971, which embodied the ad- 






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CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



ministration's plan to put the Berne 
Convention into effect. After hearings 
and extensive negotiations, many as- 
pects of S. 1971 were incorporated in 
the bill currently before the Senate, S. 
1301. Due to the spirit of cooperation 
and mutual dedication to the benefits 
of ratifying Berne, S. 1301 in its cur- 
rent form won unanimous approval in 
the Senate Judiciary Committee and 
deserves the same treatment by the 
entire body of the Senate. 

HISTORY OF BERNE CONVENTION 

The United States adopted its first 
copyright protection law pursuant to 
article I, section 8, of the Constitution 
in 1790, but that law did not provide 
protection for foreign works. Accord- 
ingly, when many nations gathered in 
1886 to consider a multilateral treaty 
on copyright protections, the United 
States did not participate. United 
States copyright protections were ex- 
tended to foreign works a few years 
later in 1891, but instead of joining 
the Berne Treaty, the United States 
decided to seek bilateral agreements 
with other countries. The primary 
benefit of Berne was that it allowed a 
foreigner to enter the courts of an- 
other signatory state and allege piracy 
of his artistic work with a guarantee 
that remedies would be available. 

After World War I, the foreign 
market for U.S. goods grew rapidly. 
This prompted some U.S. businesses to 
suggest the benefits of ratifying Berne 
to give U.S. copyright holders more 
remedies against foreign piracy. Un- 
fortunately this did not happen be- 
cause the revisions necessary in U.S. 
law fell behind other priorities. 

In 1928, this effort was doomed by 
the Rome revision of Berne, which 
added moral rights as a new obliga- 
tion. Publishers and movie producers 
quickly voiced apprehensions that 
moral rights could disrupt existing 
copyright relationships. Moreover, 
U.S. law now included the manufactur- 
ing clause— raising tariff barriers to 
works published outside the United 
States— which was incompatible with 
Berne. 

To compensate for failure to join 
Berne, the United States worked to 
create a new international copyright 
protection mechanism under the aus- 
pices of UNESCO. The result was the 
UCC— Universal Copyright Conven- 
tion—which was ratified by the United 
States in 1954. 

RECENT CHANGES CALLING FOR RATIFICATION OF 
BERNE 

In recent years, several develop- 
ments have dictated the wisdom of re- 
considering membership in Berne. The 
obstacles to joining the Berne Union 
have nearly disappeared and the in- 
centives for international protection 
of copyrights have grown. I will list 
only a few of these recent changes en- 
couraging the United States to join 
Berne: 



First, the United States withdrew 
from UNESCO, thus our input into 
the funding decisions and administra- 
tion of the UCC was terminated. 

Second, during trade and intellectual 
property negotiations, the United 
States has heard repeatedly that our 
failure to join Berne is an indication 
that the United States is not fully 
committed to protection of copyrights 
internationally— even though our pro- 
tections are in many ways more com- 
prehensive. As this issue complicated 
GATT talks, pressure grew for ratifi- 
cation. 

Third, piracy of U.S. copyrighted 
properties abroad has mushroomed. 
Billions of dollars are lost each year 
due to foreign piracy of U.S. films, 
books, and more. Without the Berne 
Convention, enforcement of U.S. 
rights abroad is difficult. 

Fourth, U.S. law is now more com- 
patible with Berne. The manufactur- 
ing clause has expired and other provi- 
sions of U.S. law can be, and are in 
this bill, easily restructured to comply 
with the Berne Convention. 

Fifth, international legal scholars, as 
well as the U.S. State and Commerce 
Departments, now agree that existing 
U.S. law is sufficient to satisfy the 
moral rights requirements of Berne. 
Thus, the few changes in U.S. law nec- 
essary to comply with Berne are found 
in S. 1301. In exchange for these few 
changes, which in many ways improve 
administration of U.S. law, the United 
States gains the many benefits of 
Berne membership. 

MORAL RIGHTS 

Mr. President, as I have stated earli- 
er, one of the reasons that the Berne 
Convention has not been ratified earli- 
er is the confusion over any incorpora- 
tion of the "moral rights" concept into 
American common law. This was ex- 
pected to be an obstacle to approval of 
S. 1301 in this Congress as well, but 
the remarkable cooperation that ac- 
companied this bill overcame all con- 
cerns and forged language that pre- 
vented the problem from arising. 

The term "moral rights" embraces 
two concepts: the right of paternity— 
the right to be acknowledged as the 
author of a particular work— and the 
right of integrity— the author's right 
to object to modification of artistic 
works. The rights have their origin in 
French law. If enforced in the United 
States, these moral rights would dras- 
tically alter current copyright rela- 
tionships. The right of paternity could 
alter the work for hire doctrine where- 
by an author is paid to produce a work 
whose copyright is held by the au- 
thor's employer, not the author. The 
right of integrity would make a maga- 
zine's or a movie producer's efforts to 
edit a written article or a film very dif- 
ficult. At a minimum, moral rights 
would cause mountains of litigation if 
applied to the United States. 



This difficulty was avoided by recog- 
nition that most international scholars 
now agree that current Federal and 
State laws provide adequate protec- 
tions for an author's rights to consti- 
tute compliance with Berne. Accord- 
ingly, S. 1301's promise to neither 
"expand or reduce" existing copyright 
protections was sufficient to comply 
with Berne's moral rights provisions. 

Mr. President, at the outset of this 
legislative process, I was concerned 
that U.S. adherence to Berne could 
have a deleterious effect on the devel- 
opment of copyright law here at 
home. When I introduced S. 1971 back 
in December, I expressed the view that 
we should render concerns about 
moral rights through Berne adherence 
"fully unfounded," that we should 
enact a high wall to prevent disruptive 
moral rights concepts from creeping 
into U.S. law. For that reasons, I sub- 
mitted at the subcommittee's hearing 
in March a discussion proposal to 
ensure no change in the treatment of 
moral rights because of Berne. I in- 
tended at the time that the amend- 
ment would stimulate "a constructive 
discussion of this important subject." 
The discussions that ensued produced 
a series of compromises acceptable to 
all the concerned Senators. 

This compromise simply built on the 
premise accepted by those supporting 
Berne from the beginning; namely, 
that U.S. implementing legislation 
should be neutral on the issue of 
moral rights. This was accomplished 
by recognizing and reinforcing the cur- 
rent delicate balance of rights between 
U.S. authors and copyright owners. In 
this context, while existing U.S. law 
satisfies U.S. obligations under article 
6bis of Berne, our judicial system has 
consistently rejected causes of action 
denominated as "moral rights" or aris- 
ing under the moral rights doctrine. 
The following case excerpts illustrate 
this point: 

The conception of "moral rights" * * * 
has not yet received acceptance in the law 
of the United States * * * what plaintiff in 
reality seeks is a change in the law of this 
country to conform to that of certain other 
countries * * * we are not desposed to make 
any new law in this respect. (.Vargas v. Es- 
quire, Inc., 164 F.2d 522, 526 (7th Cir. 1947)) 

In the present state of our law the very 
existence of the right is not clear. (Shosta- 
kovic v. Twentieth Century-Fox Film Corp., 
196 Misc. 67, 70-71, 80 N.Y.S. 2d 575, 578-79 
(N.Y. Sup. Ct. 1948)) 

The doctrine of moral right is not part of 
the law in the United States, except insofar 
as parts of that doctrine exist in our law as 
specific rights— such as copyright, libel, pri- 
vacy and unfair competition. (Geisel v. 
Poynter Products, Inc., 295 F. Supp. 331, 340 
n.5 (S.D.N.Y. 1968)) 

Declining to accept plaintiff's claim of 
moral rights violation, but granting relief on 
other grounds. (Gram v. Harris, 198 F.2d 
585, 590-91 (2d Cir. 1952)) 

Under S. 1301, none of these cases 
would be decided differently post- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28307 



Berne, except if based upon factors 
not related to United States adherence 
to Berne. 

Thus, to maintain this status quo on 
moral rights, the compromise made 
several modest adjustments to the bill. 
They included language to assure that 
Berne has no impact on: specifically 
the rights of paternity or integrity, 
section 3(b), more generally on rights 
claimed for works protected under 
title 17, section 4(c), or the scope of 
Federal preemption of copyrights law, 
section 6. With these changes in addi- 
tion to the strongly expressed instruc- 
tion that Berne is not self-executing, 
section 2, it is my belief that Berne 
under our bill will be moral rights neu- 
tral. 

The Coalition to Preserve the Ameri- 
can Copyright Tradition and the Mag- 
azine Publishers Association, which 
originally opposed Berne due to a con- 
cern over moral rights, helped craft 
the compromise and now feel comfort- 
able enough about United States ad- 
herence to Berne to no longer oppose 
S. 1301. Their decision to participate 
in the process of compromise was con- 
structive and beneficial. 

In the future, there will no doubt be 
substantial efforts to expand moral 
rights in the United States. You can 
already see that beginning to happen 
with hearings that will be held in the 
other body later this month on colori- 
zation and moral rights for fine art- 
ists. While I continue to entertain 
some significant reservations about 
the concept of moral rights, the dis- 
cussion will be wholly on the merits of 
this difficult policy question. Moral 
rights will not come in, if you will, the 
back door by virtue of our adherence 
to Berne. I look forward to the debate 
whenever it should come and expect to 
play a very active role, indeed. 

SELF EXECUTION AND EFFECTIVE DATE 

This an issue that arises with nearly 
every treaty. By the terms S. 1301, the 
Berne Convention is explicitly not 
self-executing. This means that its 
terms can only become U.S. law 
through enactment of implementing 
legislation. Thus, for instance, the 
French concept of moral rights could 
only become law if enacted by Con- 
gress. 

S. 1301 ensures that the treaty will 
not be self-executing in two ways: 
first, by stating clearly that the treaty 
is not self executing in section 2(1) of 
the bill; second, by making the imple- 
menting legislation go into effect at 
the same time that the treaty goes 
into effect thus ensuring that the 
treaty does not take precedence by vir- 
ture of timing. Thus, all rights under 
the Berne Convention are derived and 
governed exclusively by domestic law 
found in S. 1301 and preexisting State 
and Federal law. 

JUKEBOXES 

One aspect of United States law 
which requires some change in order 



to comply with the requirements of 
Berne are in provisions governing rela- 
tions between jukebox operators and 
music copyright holders. This relation- 
ship has been governed in title 17 by a 
compulsory license. The Berne Con- 
vention prohibits some forms of com- 
pulsory license, including the jukebox 
license provisions of current law. 

Article 11(1) of the Berne Conven- 
tion states that "[a]uthors of * * * 
musical works shall enjoy the exclu- 
sive right of authorising * * * the 
public performance of their work." 
This exclusive right extends to public 
performance "by any means or proc- 
ess." Accordingly, the public perform- 
ance provision of the Berne Conven- 
tion encompasses performance by 
means of recordings. Thus, on its face, 
article 11(1) does not accommodate 
the jukebox compulsory license in the 
United States Code. 

Although article lKD's public per- 
formance provisions condemn compul- 
sory licenses, other provisions of the 
Convention, such as those in article 
llbis governing broadcasting rights, 
expressly permit some compulsory li- 
censes. Article llbis permits those 
compulsory licenses which guarantee 
"authors of literary and artistic 
works" an "equitable remuneration 
* * * fixed by a competent authority" 
and which have no extraterritorial ap- 
plication and no prejudicial effects on 
moral rights. Article llbis(2). Accord- 
ingly, the committee's conclusion that 
the jukebox licensing provisions must 
be changed to comply with Berne does 
not mean that other compulsory li- 
censes need to be altered. The cable 
compulsory license at 17 U.S.C. Ill, 
for instance, is governed by the provi- 
sions of article llbis(2) of Berne. Simi- 
larly, the mechanical license in section 
115 of the Copyright Act is governed 
by article 13(1) of Berne which per- 
mits some compulsory licenses to 
record specified musical works. The 
Berne Convention permits some com- 
pulsory licenses while condemning 
others. Bernie's provisions governing 
public performances establish the 
need for a change in U.S. compulsory 
licensing for jukeboxes. 

Thus, S. 1301 replaces the compulso- 
ry license in current law with provi- 
sions adequately protecting the domes- 
tic jukebox industry, but also comply- 
ing with Berne. S. 1301 allows copy- 
right owners and the jukebox opera- 
tors to negotiate voluntary licensing 
agreements. As long as the parties ne- 
gotiate suitable agreements, through 
voluntary negotiations, the new licens- 
ing agreements are to be given effect. 
If the parties cannot agree, the Tribu- 
nal is again authorized to institute a 
compulsory arrangement. 

FORMALITIES 

The Berne Convention prohibits any 
signatory from creating formalities 
which might present an obstacle to 
copyright protections. In order to 



comply with this requirement, for in- 
stance, S. 1301 eliminates the require- 
ment that copyrighted material be 
marked with a small "c" in a circle. 

In the United States, copyright laws 
require registration as a prerequisite 
to an author's lawsuit to seek redress 
for infringement. Thus, under section 
411(a) of the current law, judicial en- 
forcement of a copyright may not be 
obtained prior to registration. To the 
extent that this registration require- 
ment makes the exercise or the enjoy- 
ment of a copyright subject to a for- 
mality, section 411(a) is incompatible 
with 5(2) of Berne. 

Based on its conclusion that manda- 
tory registration did create an incom- 
patibility, the Judiciary Committee re- 
pealed section 411(a). At the same 
time, the committee strengthened in- 
centives for voluntary registration in- 
clude: 

Retention of the prima facie eviden- 
tiary value of the certificate of regis- 
tration, which shifts the burden of 
proof to the benefit of the copyright 
holder in any potential infringement 
litigation; 

Enhancement of the statutory dam- 
ages for infringement of copyrighted 
works to ensure that technical viola- 
tions are discouraged by mandated 
statutory damages; and 

Retention of the shifting of attorney 
fees to the infringer in the event a 
copyright holder is obliged to defend 
successfully a registered copyright. 

These incentives for wholly volun- 
tary compliance with the registration 
procedures are likely to ensure that 
copyright holders continue to seek 
registration as a matter of course. Ac- 
cordingly, the courts will be able to 
continue to rely on the registration 
system to streamline copyright litiga- 
tion. 

The committee also proposed to 
repeal secton 411(a) for another 
reason. Retaining mandatory registra- 
tion could cause other rations to con- 
sider imposing onerous formalities on 
U.S. copyright ownerr, who seeks to en- 
force their rights abroad. For instance, 
U.S. copyright owners could be re- 
quired to endure lengthy waiting peri- 
ods or to translate their works into 
foreign languages or to jump through 
other procedural hoops before enforc- 
ing their legitimate rights abroad. In 
order to preclude any retaliation or to 
prevent any foreign nation from using 
U.S. registration requirements as an 
excuse to impose more onerous for- 
malities, the Judiciary Committee 
voted unanimously to repeal 411(a). 

In the spirit of minimalism— mean- 
ing making the fewest possible 
changes in United States law to 
comply with Berne— the proponents of 
S. 1301, Senators DeConcini, Leahy, 
and I, are now asking the Senate to 
approve an amendment which does 
not fully repeal section 411(a) but still 









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CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



fully removes any taint of a formality. 
The groundwork for this compromise 
with the House was laid by the Ad Hoc 
Committee on Berne Compliance 
which testified in the 99th Congress 
that "section 411 is * * * not compati- 
ble with Berne to the extent that it re- 
quires registration of a work of which 
the United States is not the country of 
origin." 

In other words, as long as foreign 
copyright holders are not required to 
comply with the registration require- 
ment, the United States is free to 
impose stricter procedural require- 
ments on its own nationals. Because 
foreign copyrights are not burdened 
with additional requirements, no coun- 
try can claim any justification for im- 
posing formalities on U.S. copyright 
holders who attempt to enforce their 
rights abroad. 

Thus, S. 1301, as it will pass the 
Senate a little later today, will create a 
two-tiered registration system. The 
United States Code will continue to re- 
quire U.S. authors to register as a pre- 
requisite to enforcing a copyright. The 
United States Code will not, however, 
require foreign authors or copyright 
holders to register prior to instituting 
a suit to protect their rights in this 
country. This clearly satisfies the re- 
quirements of article 5(2) of Berne. I 
still have doubts about treating U.S. 
citizens more harshly than foreign au- 
thors, but as I have stated earlier, S. 
1301 contains incentives ensuring that 
practically every U.S. author would 
choose to register anyway. 

This formalities issue was the major 
difference with the House. With the 
compromise version of section 411(a) 
in place, this bill is expected to be ac- 
ceptable to the House of Representa- 
tives and ready for the President's 
desk. 

OTHER CHANGES 

S. 1301 also contains several other 
changes in U.S. copyright law in order 
to comply with the convention. For ex- 
ample, the bill codifies the protection 
of architectural plans. Current U.S. 
copyright law protects architectural 
blueprints and similar plans, but it has 
not been expressly stated in American 
copyright law. S. 1301 will ensure con- 
tinued protection for architectural 
plans, but copyright protection will 
not be extended to the architectural 
structure, itself. Duplication of a 
building will still be permissible if 
done by visual observance of the struc- 
ture without the use of the copyright- 
ed blueprints. 

CONCLUSION 

For years the United States has been 
missing important benefits from Berne 
membership. As a member of the con- 
vention, the United States will gain 
for its authors more international pro- 
tections for the rights of U.S. copy- 
right owners in foreign lands. Because 
the United States is the world's fore- 
most exporter of copyrighted material, 



this Nation has the most to gain from 
adherence to the Berne Convention. 
In addition, Berne membership will 
position the United States to negotiate 
further international protections for 
intellectual property. 

Accordingly, adoption of S. 1301 will 
be a momentous event for the protec- 
tion of U.S. intellectual property. I am 
very pleased to be a part of this 
moment. I would particularly like to 
express my appreciation for the spirit 
of cooperation which has prevailed 
throughout Senate consideration of 
this bill. Although Chairman DeCon- 
cini, Senator Leahy, and I have had 
differences of procedure and substance 
with regard to this bill, those differ- 
ences were always secondary to the 
course which would secure passage of 
a bill and further U.S. intellectual 
property interests. I have appreciated 
that spirit of cooperation, mutual 
trust, and dedication to common objec- 
tives. It is a credit as well to the entire 
Patents Subcommittee and the full Ju- 
diciary Committee of the Senate. As I 
have said earlier, I am proud to be a 
participant in this process. 

Again, I wish to compliment both 
Senators Leahy and DeConcini for 
the work they have done on this bill. 
Senator DeConcini has done a terrific 
job in chairing this particular subcom- 
mittee, and it has been a pleasure to 
serve with him as well as the distin- 
guished Senator from Vermont. 
I reserve the remainder of my time. 
The PRESIDING OFFICER. The 
Senator has 8 seconds remaining. 
Mr. HATCH. I yield back my time. 
The PRESIDING OFFICER. The 
Senator yields back the remainder of 
his time. 
The Senator from Mississippi. 
Mr. COCHRAN. Mr. President, is it 
correct that under the order previous- 
ly entered, the Senator from Mississip- 
pi has 10 minutes? 

The PRESIDING OFFICER. The 
Chair will state to the Senator from 
Mississippi that under the order there 
were to be 20 minutes divided on tech- 
nical amendments to be offered and 
after that was disposed of, there was 
additional time allocated to the Sena- 
tor from Mississippi of 30 minutes, and 
20 minutes equally divided between 
the Senator from Arizona and the 
Senator from Vermont. 

Mr. LEAHY. Mr. President, if the 
Senator from Mississippi would yield a 
minute, I think I know how the unani- 
mous-consent agreement is set in. 
Maybe we could work it out there if 
Senators had no objection, if we voice 
voted the substitute amendment. Then 
I think that opens the time for the 
Senator from Mississippi. 

I was not on the floor when it was 
taken up. 

Mr. COCHRAN. Mr. President, I do 
not want to cut the Senator off, but 
we entered an order and I happened to 



be the acting leader on our side of the 
aisle when the order was entered. 

Unless it was modified after it was 
entered, it is my recollection that 10 
minutes were to be given to the Sena- 
tor from Utah, Mr. Hatch, 10 minutes 
to the distinguished Senator from Ari- 
zona, Mr. DeConcini, 5 minutes to the 
distinguished Senator from Vermont, 
Mr. Leahy, and 10 minutes to this Sen- 
ator. 

The PRESIDING OFFICER. The 
Chair will state that the order would 
have allowed for 30 minutes to the 
Senator from Mississippi, and 20 min- 
utes to be equally divided by the Sena- 
tor from Arizona and the Senator 
from Utah with an additional 5 min- 
utes to the Senator from Vermont on 
the bill and we had a 20-minute time 
limitation in addition on the technical 
amendments which we have just now 
completed. 

The Senator may use his time at the 
present, the Chair would observe, or 
he may wait until after we dispose of 
the technical amendments. 
Mr. COCHRAN. I thank the Chair. 
Mr. WILSON. Mr. President, will the 
Senator yield for a question? 

Mr. COCHRAN. I am happy to yield 
to the distinguished Senator. 

Mr. WILSON. I thank my friend 
from Mississippi. 

My question is, since I would like to 
make a brief statement in support of 
the legislation, if the Senator does not 
contemplate using all 10 minutes, I 
would be happy to be recipient of 
some of his time, if not, it would be my 
intention to ask unanimous consent 
for about 4 or 5 minutes to make a 
brief statement. 

Mr. COCHRAN. Mr. President, I do 
not intend to use 30 minutes. I wish to 
use about 10 minutes to discuss the 
legislation and an amendment which I 
am going to have printed in the 
Record. After I have used that time, I 
will be happy to yield the necessary 
time to the Senator from California. 

I also understand the Senator from 
Pennsylvania would like to speak on 
the bill for a few minutes. I hope his 
interest in speaking can be accommo- 
dated and I would be happy to yield 
time to him. 

The PRESIDING OFFICER. The 
Senator may yield time if he desires 
and use his time at the present time. 

The Senator from Mississippi is rec- 
ognized. 

Mr. COCHRAN. Mr. President, I rise 
today to voice my concern about the 
failure of this legislation to address a 
fundamental issue affecting creators' 
rights under the Copyright Act. 

S. 1301 does not make any changes 
in the "work made for hire" doctrine 
of the Federal copyright law. Under 
that doctrine, the rights of authorship 
and of copyright ownership vest not in 
the creator, but rather in his employer 
or in the party that commissions him. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28309 



This doctrine is an exception to the 
basic copyright principle that the 
"author" and copyright owner of an 
original creation is the creator of that 
work. 

The interpretation of the work for 
hire doctrine by the courts, and its op- 
eration in the marketplace where cre- 
ative work is commissioned, have 
broadened its scope far beyond the 
original intent and purpose. The effect 
of that expansion has been to deprive 
artists and other creators of all the 
rights that the copyright laws were in- 
tended to provide them. 

The Berne Convention itself does 
not mention the work for hire doc- 
trine. But, the convention was intend- 
ed to protect the authorship rights of 
creators. It requires member States to 
recognize the right to claim author- 
ship and the right to object to certain 
acts that affect the integrity of the 
work or the reputation of the author. 
While Berne seeks to protect the 
rights of "authors," it does not define 
that critical term. The absence of such 
a definition has provided the rationale 
for avoiding the work for hire issue on 
the ground that it is beyond the scope 
of Berne. Proponents of this approach 
also cite the divergence of Berne 
member nations in defining who 
should be considered an author. Some 
nations recognize only natural persons 
as authors, while others allow corpo- 
rate entities to assume that status. 

This argument misses the point. The 
question is not whether the Berne 
Convention explicitly requires changes 
in our work for hire doctrine; it obvi- 
ously does not. Instead, the question 
ought to be whether the rights pro- 
claimed by Berne are protected by 
U.S. copyright law. In a very real and 
practical way, our current copyright 
statutes force artists into relinquish- 
ing many of their rights as a condition 
of being hired. 

I have no quarrel with the view that 
the passage of this bill will enable U.S. 
copyright owners to better protect 
their intellectual property. But I be- 
lieve that view is deficient to the 
extent that it neglects the need to en- 
courage creativity at home. Work for 
hire is putting many creators out of 
business and is forcing many others to 
live at a subsistence level hardly con- 
ducive to the development of their cre- 
ative talents. If the impact of work for 
hire is not addressed, the attractive- 
ness and demand for works created in 
the United States will decline as the 
size and diversity of domestic creative 
talent diminishes. 

Most important, enactment of Berne 
legislation without addressing the con- 
cerns of creators ignores the constitu- 
ency that our copyright laws were de- 
signed to protect. No one has ever 
argued that our copyright laws were 
intended to reward investors or those 
with the resources to buy talent. Their 
purpose is to stimulate creativity and 



to strike a balance between creators' 
interests in exploiting their works and 
the public interest in using and enjoy- 
ing them. 

In short, the right to claim author- 
ship of one's own works under the 
Berne Convention is an academic one 
if the legal and practical effects of our 
own copyright laws undermine that 
right. 

The insufficiency of current U.S. 
copyright law to protect artists in the 
area of work for hire is similar to the 
problem of moral rights, which was 
discussed during hearings on the 
Berne legislation both in the Senate 
and in the other body. 

The concerns of creators over this 
issue are also based on the lack of pro- 
tection for the integrity of an artist's 
work. Unlike the issue of work for 
hire, U.S. copyright law does not ex- 
plicitly provide for moral rights. The 
committee has concluded that the 
entire body of U.S. law, including 
State law, case law, common law and 
Federal trademark statutes, provides 
sufficient moral rights protection and 
that explicit treatment is unnecessary 
in order to meet Berne's minimum 
standards. 

Others disagree with this view and 
believe that U.S. law should provide 
explicitly for moral rights protection 
in order to comply with the standards 
set by the Berne Convention. In addi- 
tion to work for hire, this is another 
issue of fundamental importance to 
artists that should be addressed if we 
are to make our laws consistent with 
an international treaty for the protec- 
tion of artists' rights. 

The unfair and burdensome oper- 
ation of work for hire agreements, and 
the court's expansive interpretation of 
the concept of "employee," have se- 
verely diminished the benefits to cre- 
ators under the copyright laws. If a 
creator prepares a work made for hire, 
he or she is no longer the author, for 
copyright purposes. Rather, the Copy- 
right Act vests initial copyright in that 
work in the employer or the commis- 
sioning party, who receives all future 
income that may be derived from any 
use of the work in any medium. 

Under the work for hire arrange- 
ment, creators have no further rela- 
tionship to their own creative output: 
they have no right to display it, to re- 
produce it, to distribute it, or to create 
other works based on it. Artists cannot 
even use works for hire in their own 
portfolios without the permission of 
the party that commissions them, and 
they cannot insist that they be identi- 
fied as the author of their works. 

Under current law, the client can 
change the art and use it again with- 
out limitation, without benefiting the 
true author. In addition to losing all 
these rights, the creator receives none 
of the normal employee benefits such 
as unemployment insurance, health 
insurance, sick pay, pension benefits, 



or disability. Nor are they provided 
with a workplace or materials. 

The livelihoods of freelance artists, 
photographers, and writers depend on 
their ability to claim "authorship" for 
the pieces they produce. They build 
their reputation, and therefore their 
ability to attract clients, on the basis 
of past performance. Their careers 
succeed or fail by their skill and style 
in translating through their own cre- 
ative expression the ideas and mes- 
sages society needs to disseminate. 

The adverse effects of work for hire 
extend beyond creators to our society 
as a whole. In our system, the copy- 
right laws are intended to foster dis- 
semination of diverse ideas, and to fa- 
cilitate conversion of those ideas into 
tangible form by providing incentives 
and rewards for creators. When those 
incentives and rewards are eroded as 
they are by work for hire, the public 
interest in the free flow of informa- 
tion is thereby diminished. 

An example of a practical problem 
that arises from the vague and uncer- 
tain rights of artists is a case involving 
a photographer in Chicago. The pho- 
tographer, Stan Malinowski, was com- 
missioned to take photographs for a 
magazine, but no written agreement 
assigning copyright ownership in the 
photographs to the publisher was ever 
signed. Instead, a form work for hire 
agreement was stamped on the back of 
the checks issued to Malinowski after 
his work was completed, so that when 
he endorsed the checks he would also 
be agreeing to a work for hire arrange- 
ment. 

To prevent Malinowski from cross- 
ing out this language, the back of the 
checks provided that any alteration of 
the work for hire legend would void 
the check. Malinowski struck out that 
legend anyway, and cashed the checks. 
He then sued the publisher for copy- 
right infringement, whereupon he was 
charged with fraud and racketeering 
for altering the checks. While the 
judge has dismissed these charges, Ma- 
linowski faces prolonged litigation 
over whether he should be considered 
an "employee" of the magazine, and 
over other work for hire questions. 

The current definition of work for 
hire invites this sort of litigation, and 
it is by no means certain that artists 
will ultimately prevail. In fact, many 
creative artists since the 1976 Copy- 
right Act went into effect have been 
on the losing end of work for hire 
cases, even when they operate as inde- 
pendent contractors and decline to 
sign work for hire agreements. 

Most work for hire abuses never see 
the light of day in the courtroom. In 
1982, at the only hearing ever held on 
work for hire legislation since enact- 
ment of the 1976 act, Robin Brickman, 
a Rhode Island illustrator and 
member of the Graphic Artists Guild, 
testified about another example of the 








28310 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



destructive effect of work for hire on 
creators' careers and income. 

Ms. Brickman had signed a work for 
hire contract with Doubleday to pro- 
vide 28 drawings for use in the interior 
of a book. For a modest fee, she pro- 
duced a series of drawings which the 
publisher found acceptable. In fact, 
the publisher liked the work so much 
that one of the drawings was altered 
and used as the front jacket for the 
book. 

The illustrator received no addition- 
al payment for the use of her illustra- 
tion on the jacket. Nor was she able to 
complain about the fact that the 
drawing had been altered. Nor would 
she have been able to complain if the 
publisher had chosen not to give her 
credit as the illustrator who did the 
art. 

Why does not the creator simply 
refuse to sign the work for hire con- 
tract? Assignments are offered on a 
take-it-or-leave-it basis. If the artist, 
writer, or photographer asks for a lim- 
ited transfer of rights, the publisher 
selects a different creator to do the as- 
signment. 

It is important to recognize that 
most independent artists, photogra- 
phers, or writers working in highly 
competitive fields simply cannot nego- 
tiate effectively with corporate art 
buyers. Confronted with such superior 
bargaining power, most artists have no 
choice but to accept work for hire con- 
tracts. By cutting creators off from po- 
tential reuse fees and control of their 
work, work for hire makes it unlikely 
that their bargaining positions will be 
strengthened as their careers progress. 
No creator is safe from work for hire 
abuses. A member of the American So- 
ciety of Magazine Photographers who 
has been a professional photographer 
for 30 years relates an unfortunately 
typical example. In many of his adver- 
tising jobs, he is presented with work 
for hire language after the negotia- 
tions are completed and the work is 
underway. While this particular pho- 
tographer refuses to give up all au- 
thorship and copyright rights under a 
work for hire arrangement, he has lost 
much of his business as a result. Even 
this well-established artist finds it dif- 
ficult to survive when the prevailing 
industry practice is to insist upon work 
for hire agreements, or refuse to use 
any artist who declines that invitation. 
To rectify the worst of these prob- 
lems, I have prepared an amendment, 
which I will not call up, but which I 
will request be printed in the Record 
along with an explanatory statement. 
I believe this amendment, which is far 
less comprehensive than my bill, S. 
1223, would ensure improved safe- 
guards for artists' rights. I will not 
offer the amendment at this time be- 
cause of the assurances given to me by 
the Senator from Vermont [Mr. 
Leahy], the manager of the bill, and 
the distinguished chairman of the 



Subcommittee 



[Mr. 



Copyrights 
DeConcini]. 

Mr. President, I ask unanimous con- 
sent that a copy of my amendment 
and the explanatory statement be 
printed in the Record. 

There being no objection, the mate- 
rial was ordered to be printed in the 
Record, as follows: 

Proposed Amendment to S. 1301 

Sec. 4. Subject Matter and Scope of Copy- 
rights. 

Chapter 1 of title 17 of the United States 
Code is amended— 

(1) in section 101— 

(C) in subdivision (1) of the definition of 
"work made for hire" by adding at the end 
thereof the following: "only if the employee 
receives all employment benefits due under 
applicable State and Federal law, and the 
employer withholds taxes from the compen- 
sation paid to the employee and remits such 
taxes to the Internal Revenue Service." 

(D) in subdivision (2) of the definition of 
"work made for hire"— 

(1) by inserting between "atlas," and "if" 
the word "only"; and 

(2) by inserting after "written instrument 
signed by them" the following: ", prior to 
commencement of any physical or intellec- 
tual effort related to the specially ordered 
or commissioned work," 

(E) in the definition of "joint work," by 
adding the following sentence: 

"For a specially ordered or commissioned 
work to be a joint work coowned by the spe- 
cially ordering or commissioning party, the 
work must meet the foregoing definition, 
and for each such work all coowners must 
expressly agree in a separate written instru- 
ment, signed by them prior to the com- 
mencement of any physical or intellectual 
effort related to the work, that it shall be 
considered a joint work." 

Explanation of Proposed Amendment to S. 
1301 

The proposed amendment to S. 1301 
would make four changes to section 101 of 
the Copyright Act that are designed to im- 
prove the ability of independent creators to 
protect their authorship and copyright 
rights in their own works. 

1. Definition of "Employee" Under Subdi- 
vision (1) of Work Made For Hire Defini- 
tion: 

In enacting a definition of "work made for 
hire" in the 1976 Copyright Act, Congress 
determined that any work prepared by an 
"employee" in the scope of his or her "em- 
ployment" would be considered a work 
made for hire even without a written instru- 
ment so providing. 17 U.S.C. § 101 (subdivi- 
sion (1) of the definition of "work made for 
hire"). While the legislative history of the 
1976 Act strongly suggests that Congress in- 
tended the concept of employment to 
extend only to salaried employees,* Con- 



• For example, the publishing industry acknowl- 
edged at the time an early version of the work for 
hire language was drafted that the concept of em- 
ployment was intended to apply only to salaried 
employees: "Works for hire— in which copyright is 
by law owned by the employer— would be redefined 
to include only work done by a salaried employee in 
the scope of his regular duties. . . ." Statement of 
the American Book Publishers Council to the Reg- 
ister of Copyrights, November. 1963. W. Patry, Lat- 
man's The Copyright Law 120 n. 28 (6th ed. 1986). 



gress did not expressly define the term "em- 
ployee" in the definition of work made for 
hire. 

The lack of an express definition in the 
language of the statute has led to years of 
disagreement in the courts of appeals over 
the meaning of this key statutory term, and 
indeed over the proper interpretation of the 
significance of the 1976 revisions to the 
work made for hire doctrine. Compare Com- 
munity for Creative Non-Violence v. Reid, 
No. 87-7051 (D.C. Cir. May 20, 1988), and 
Easter Seal Society for Crippled Children 
and Adults of Louisiana, Inc. v. Playboy En- 
terprises, 815 F.2d 323 <5th Cir. 1987), cert, 
denied, 56 U.S.L.W. 3666 (Mar. 29, 1988), 
with Aldon Accessories Ltd v. Spiegel, Inc., 
738 F.2d 548 (2d Cir.), cert, denied, 469 U.S. 
982 (1984), Brunswick Beacon, , Inc. v. 
Schock-Hopchas Publishing Co., 810 F.2d 
410 (4th Cir. 1987), and Evans Newton Inc. 
v. Chicago Sys. Software, 793 F.2d 889 (7th 
Cir.), cert, denied, 107 S. Ct. 434 (1986). 
Under one view adopted by the District of 
Columbia and Fifth Circuits, the determina- 
tion whether a creator is an "employee" is 
guided by the rules of agency law set forth 
in the Restatement (Second) of Agency 
§220 (1958). See Reid, slip op. at 19; Easter 
Seal, 815 F.2d at 335-36 n. 20. Under this 
view, if consideration of the Restatement 
factors leads to the conclusion that the cre- 
ator of a commissioned work is not an "em- 
ployee," the work cannot be a work made 
for hire unless it meets the criteria estab- 
lished in subdivision (2) of the definition of 
that term. That subdivision provides that a 
commissioned work qualifies as a work made 
for hire only if there is a written agreement 
so providing, and the work falls within one 
of nine enumerated categories of works. See 
17 U.S.C. § 101 (subdivision (2) of definition 
of "work made for hire"). 

Under the approach embraced by the 
Second, Fourth and Seventh Circuits, and 
"employee" for work for hire purposes is de- 
termined by reference to principles devel- 
oped under the 1909 Copyright Act, which 
posited that the right to supervise and 
direct the creator's work, together with the 
degree to which that right was actually ex- 
ercised, were the guiding criteria. Aldon, 738 
F.2d at 552. Thus, Aldon held that even in- 
dependent contractors working on commis- 
sion could be classified as "employees" if 
the court found that the requisite degree of 
supervision and control was exercised by the 
commissioning party over the creator's 
work. 

The amendment's proposed definition of 
"employee" is intended to resolve the con- 
flict in the courts by establishing two objec- 
tive and yet flexible employment criteria. 
First, no creator can be classified as an "em- 
ployee" unless he receives "all employment 
benefits due under applicable State and 
Federal law." The amendment does not at- 
tempt to identify the employment benefits 
necessary to warrant a finding that a cre- 
ator is an "employee" because State law 
varies with respect to the indicia of employ- 
ment, and both State and Federal law on 
that issue will change over time. It is never- 
theless anticipated that the categories of 
employment benefits for a true "employee" 
under amended clause (1) may include: (1) 
payment of a salary or other form of regu- 
lar compensation; (2) payment of overhead 
expenses by the employer (e.g., rent, utili- 
ties, support staff, office and material ex- 
penses); (3) availability of a regular work- 
place for the employee; (4) paid vacation 
and sick leave; (5) coverage under a health 
and disability insurance program if such a 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28311 



program has been established by the em- 
ployer; (6) eligibility for pension benefits if 
the employer has established a pension plan 
for employees; (7) coverage under the feder- 
al social security system and the payment of 
obligations thereunder; (8) eligibility for un- 
employment insurance and payment of un- 
employment taxes by the employer; and (9) 
eligibility for workman's compensation ben- 
efits and payment of workman's compensa- 
tion insurance premiums by the employer if 
required by law. The place of employment 
will determine which state law governs for 
purposes of ascertaining the applicable state 
employment benefits. If only some, but not 
all, of the applicable employment benefits 
are extended to the purported "employee," 
the works created by such person cannot be 
considered "made for hire" under amended 
clause (1) of the definition. 

Second, the employer must withhold taxes 
from the payments to the employee, and 
must remit those taxes to the IRS, in order 
for the creations of the purported employee 
to be considered works made for hire under 
clause (1). This requirement is intended to 
ensure that a creator is treated as an em- 
ployee for copyright purposes only if the 
employer itself takes action through with- 
holding which clearly shows that the em- 
ployer considers the creator to be an em- 
ployee. Although the statute refers to taxes 
without specifying their precise nature, only 
federal income taxes are subject to with- 
holding and are then paid to the IRS. Thus, 
the reference to taxes in the bill is intended 
to refer only to federal income taxes. 

It is important to note that both of the 
employment criteria added by the proposed 
amendment must be satisfied in order to 
classify a creator as an "employee" under 
subdivision (1) of the work made for hire 
definition. Accordingly, it is not enough for 
the purported employee to receive all appli- 
cable employment benefits; the alleged em- 
ployer must also withhold federal income 
taxes and remit them to the IRS in order 
for a work to be classified as an employee 
work made for hire. Conversely, it is not 
enough for the purported employer to with- 
hold taxes and remit them to the IRS; the 
"employee" must also receive all applicable 
employment benefits in order to satisfy 
clause (1). 

2. Changes to Subdivision (2) of Defini- 
tion of Work Made for Hire: 

The proposed amendment would make 
two changes to subdivision (2) of the work 
made for hire definition, which covers cer- 
tain categories of specially ordered or com- 
missioned works. First, the amendment 
would provide that the nine enumerated 
categories of commissioned works could 
qualify as works made for hire "only if the 
parties expressly agree in a written instru- 
ment signed by them. ..." (emphasis on 
added word). The purpose of this amend- 
ment is to make absolutely clear that the 
nine categories of commissioned works set 
out in subdivision (2) cannot be works made 
for hire unless there is a written agreement 
to that effect. The amendment is intended 
to prevent courts from concluding that the 
commissioned works listed in subdivision (2) 
can still qualify as "employee" works made 
for hire under subdivision (1) if the prereq- 
uisites of subdivision (2) are not satisfied. 
Thus, the proposed amendment provides 
that the subdivision (2) categories of works 
can be classified as works made for hire only 
if the writing requirement is met. 

The second modification to subdivision (2) 
of the work made for hire definition builds 
upon the first. It would provide that in 



order for a commissioned work falling 
within one of the nine categories to be a 
work made for hire, the parties must not 
only agree in writing, they must do so "prior 
to commencement of any physical or intel- 
lectual effort related to the specially or- 
dered or commissioned work. . . ." The pur- 
pose of this proposal is to prevent abusive 
practices of commissioning parties that un- 
dermine the protection that the writing re- 
quirement was intended to give creators. 
The objective of that requirement was to 
ensure that both parties, particularly the 
creator who most often finds himself in the 
weaker bargaining position, makes a rea- 
soned and independent determination to 
enter into a work made for hire arrange- 
ment. Unfortunately, some commissioning 
parties have forced creators to sign work for 
hire agreements by proposing such an 
agreement after the work is well underway 
or is completed but before the creator has 
been paid. In these situations, the creator 
must sign the agreement in order to get 
paid, or else undertake expensive litigation. 
The most egregious of these practices con- 
sists of stamping form work for hire lan- 
guage on the back of a check which the cre- 
ator must then endorse in order to get paid? 

The proposed amendment would prevent 
this and any other after-the-fact use of 
work made for hire agreements. In order to 
be enforceable under the amendment, such 
an agreement must be negotiated and exe- 
cuted before any effort, physical or intellec- 
tual, is expended on the project. With the 
knowledge that commissioned work made 
for hire agreements meeting the standards 
of subdivision (2) must be signed up front, 
the parties must decide at the outset of 
their relationship whether a work made for 
hire arrangement is desirable. At that stage, 
the creator retains his independence to 
decide whether such an agreement would be 
in his best interests. If the commissioning 
party desires to acquire all or some of the 
creator's copyright rights after the com- 
mencement of physical or intellectual effort 
on the project, it can do so only through an 
assignment agreement and not by a work 
made for hire contract. Any work made for 
hire contract signed after commencement of 
physical or intellectual effort would be void 
and unenforceable. 

3. Definition of Joint Work: 

Finally, the proposed amendment would 
change the definition of "joint work" in sec- 
tion 101 by establishing a new objective test 
for determining whether a specially ordered 
or commissioned work constitutes a joint 
work in which the co-authors own the copy- 
right as tenants in common. As owners of 
the copyright, the co-authors of a joint 
work have an undivided interest in the work 
as a whole, and each co-author enjoys an in- 
dependent right to exploit or license the 
copyright, as long as the co-author exercis- 
ing that right accounts to the other co- 
author for the profits earned. See Oddo v. 
Ries, 743 F.2d 630, 633 (9th Cir. 1984); Pye v. 
Mitchell, 574 F.2d 476, 480 (9th Cir. 1978). 

Under present law, the touchstone for de- 
termining whether a work is joint work is 
the intention of the parties. Section 101 cur- 
rently provides that a "joint work" is "a 
work prepared by two or more authors with 
the intention that their contributions be 
merged into inseparable [as in a painting] 
or interdependent [as in a motion picture] 
parts of a unitary whole." 17 U.S.C. § 101 
(definition of "joint work"). It is not enough 
merely for the parties to intend to create a 
joint work; each co-author must in fact 
make a genuine contribution to the creation 



of the joint work. See Whelan Associates, 
Inc. v. Jaslow Dental Laboratory, Inc., 609 
F. Supp. 1307, 1318-19 (E.D. Pa. 1985), aff'd, 
797 F.2d 1222 (3d Cir. 1986), cert, denied, 107 
S. Ct. 877 (1987) (the "general assistance 
and contributions" to the project by the 
commissioning party did not make him the 
co-author of the work). 

The bill proposes to supplement this "in- 
tention of the parties" test only with re- 
spect to specially ordered or commissioned 
works. Artists and other independent con- 
tractors have been faced with post hoc 
claims that works created on commission, 
for which no written agreement regarding 
copyright ownership or work made for hire 
status exists, are joint works because the 
parties somehow "intended" them to be 
such. The evidence of intent frequently is 
not probative one way or another, particu- 
larly when the claim of joint authorship 
arises after-the-fact. Indeed, commissioning 
parties have frequently asserted a "joint au- 
thorship" claim as a back-up defense in 
cases in which their primary assertion is 
that they are the sole owners under the 
work for hire doctrine. See, e.g., Reid, slip 
op. at 19-20; Schmid Bros., Inc. v. W. Goebel 
Porzellanfabrik KG., 589 F. Supp. 497, 501 
(E.D.N.Y. 1982) (ceramic figurines held to 
be joint works); Mister B. Textiles, Inc. v. 
Woodcrest Fabrics, Inc., 523 F. Supp. 21, 24- 
25 (S.D.N.Y. 1981) (fabric design held to a 
joint work). 

To eliminate any possibility of nebulous 
or illusory after-the-fact claims of joint au- 
thorship of specially ordered or commis- 
sioned works, the amendment would change 
the definition of "joint work" to provide 
that the parties "must expressly agree in a 
separate written instrument, signed by them 
prior to the commencement of any physical 
or intellectual effort related to the work, 
that it shall be considered a joint work." 
Thus, the parties must still intend that 
their contributions "be merged into insepa- 
rable or interdependent parts of a unitary 
whole"; but in order for their work to be le- 
gally considered a joint work, they must me- 
morialize that intention in a written instru- 
ment before the project begins. 

If this proposal is adopted, the contribu- 
tions to a commissioned work would not be 
merged into a joint work unless the writing 
requirement was satisfied. If that require- 
ment was not complied with, the copyright 
in the contribution of each author would be 
owned by that author alone. Thus, if two or 
more contributing authors decided to enter 
into a joint work agreement after beginning 
work on the project, such an agreement 
would be void and unenforceable. The copy- 
rights in their respective contributions 
would be separately owned by each individ- 
ual author, much like copyright ownership 
is determined with respect to a contribution 
to a collective work. See 17 U.S.C. § 201(c) 
(copyright in each separate contribution to 
a collective work vests intitially in the 
author of the contribution). 

Mr. COCHRAN. Mr. President, I 
would like to take a few moments to 
ask the cosponsors of the Berne bill, 
Senator Leahy, and the chairman of 
the subcommittee responsible for 
copyright matters, Senator DeCon- 
cini, a few questions concerning my 
work for hire bill, S. 1223. 

First, I ask the distinguished Sena- 
tor from Vermont whether he believes 
that Congress should take another 










28312 

look at the work for hire statutes and 
their impact on artists' rights? 

Mr. LEAHY. I would support efforts 
by this subcommittee to look into this 
issue to determine if legislative action 
is necessary to provide proper guid- 
ance to the courts and to ensure that 
artists' rights are being protected in 
this area. We have not reviewed work 
for hire since October 1982, during the 
97th Congress, and would undoubtedly 
benefit from another look at the issue. 
While I am not convinced of the 
merits of all of the proposals con- 
tained in your bill, S. 1223, I believe it 
is a starting point for discussion and 
debate among the members of the 
Copyrights Subcommittee. 

Mr. COCHRAN. I appreciate the 
comments of the Senator from Ver- 
mont. Now, I would like to ask the 
chairman of the Patents, Copyrights, 
and Trademarks Subcommittee 
whether he will bring this matter 
before the subcommittee in the next 
Congress? 

Mr. DeCONCINI. As I have in- 
formed my colleague from Mississippi, 
it was my intent to schedule a hearing 
on your work for hire bill during this 
Congress. Unfortunately, because of 
the lengthy Supreme Court confirma- 
tion process and consideration of the 
Berne Treaty and other parts of our 
agenda, it was not possible to do so. 

If I am chairman of the subcommit- 
tee in the 101st Congress, I will sched- 
ule a hearing on work for hire legisla- 
tion early in the first session. I have 
heard great concern voiced about work 
for hire arrangements throughout the 
creative industry, particularly from 
photographers, artists, and other free- 
lance professional creators who work 
as independent contractors. I agree 
with my friends from Mississippi and 
Vermont that a full exploration of the 
issue is warranted. I therefore give the 
Senator from Mississippi my commit- 
ment to hold hearings on his work for 
hire bill promptly in the next Con- 
gress if it is in my authority to do so. 
Mr. COCHRAN. I thank the chair- 
man of the Copyrights Subcommittee 
and I look forward to working with 
you, along with other members of the 
subcommittee, toward the goal of en- 
acting work for hire reform legislation 
next year. 

Mr. President, I thank the distin- 
guished Senators for their cooperation 
in assuring that this issue will receive 
attention in the early part of the next 
Congress and that we will get around 
to addressing this very important and 
unfair application of our copyright 
laws to independent artists. 

Mr. President, may I inquire what 
the situation is with respect to the 
time on the bill? 

The PRESIDING OFFICER. The 
Senator from Mississippi has 16 l /z min- 
utes remaining. 

Mr. COCHRAN. Mr. President, I re- 
serve the remainder of my time. 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



The PRESIDING OFFICER. The 
Senator from Vermont has 5 minutes 
allocated to him. 

Mr. LEAHY. Mr. President, I believe 
the Senator from Pennsylvania, Sena- 
tor Specter, wanted to speak. 

I wonder if we might do this while 
we are waiting: I said earlier that I was 
going to ask for a voice vote on this 
amendment. Would it be in order to 
ask for that at this point? 

The PRESIDING OFFICER. The 
Senator is correct. 

Mr. COCHRAN. Will the Senator 
yield for a question? 
Mr. LEAHY. Of course. 
Mr. COCHRAN. I have been advised 
that Senator Wilson, who was on the 
floor previously, would like to be 
heard for a few minutes on the subject 
of the bill. I would agree to the Sena- 
tor's request, with the understanding 
that his right to speak will not be cut 
off. 

Mr. LEAHY. Yes. I just thought, 
while we have the time, that if we 
went to a voice vote now we would still 
have third reading on the overall bill 
and give everybody a chance to speak 
before that. 

The PRESIDING OFFICER. The 
question is on agreeing to the amend- 
ment. 

The amendment (No. 3411) was 
agreed to. 

Mr. LEAHY. Mr. President, I move 
to reconsider the vote by which the 
amendment was agreed to. 

Mr. HATCH. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. LEAHY. Mr. President, I do not 
want in any way to preclude anybody 
who wishes to speak, but would it be in 
order now to ask for the yeas and nays 
on S. 1301, as amended? 

The PRESIDING OFFICER. The 
Senator is correct. 

Mr. LEAHY. Mr. President, I ask for 
the yeas and nays on S. 1301, as 
amended. 

The PRESIDING OFFICER. Is 
there a sufficient second? There is a 
sufficient second. 
The yeas and nays were ordered. 
Mr. LEAHY. I yield the floor. 
Mr. HATCH. Mr. President, I do not 
intend to delay this debate or the final 
vote on this matter except a minute or 
so. 

Let me just make a few comments on 
the work-for-hire issue that has been 
raised. 

It is critical to reiterate that S. 1301 
is neutral on the issue of moral rights 
and therefore, also on the issue of 
work for hire. The bill acknowledges 
that current Federal and State laws 
provide adequate protections for an 
author's rights to constitute compli- 
ance with Berne. The bill states that it 
will neither "enlarge or diminish" ex- 
isting copyright protections. 



The term "moral rights" embraces 
two concepts: The right of paternity— 
the right to be acknowledged as the 
author of a particular work— and the 
right of integrity— the author's right 
to object to modification of artistic 
works. As stated previously, if moral 
rights were enforced in the United 
States, these rights would drastically 
alter current copyright relationships. 

Specifically, the right of paternity 
would abrogate the work-for-hire doc- 
trine whereby an author is paid to 
produce a work whose copyright is 
held by the author's employer, not the 
author. The right of integrity would 
make a magazine's or movie producer's 
efforts to edit a written article or a 
film very difficult. 

For example, in the context of a 
movie, it would be difficult even to 
decide which artist, given a host of 
players such as a number of actors and 
a director, should be given the editing 
rights— particularly in the event the 
artists disagree as to how the film 
should be edited. At a minimum, moral 
rights in the work for hire context 
would cause mountains of litigation if 
applied to the United States. 

Moreover, alteration of the work for 
hire doctrine would be problematic in 
the publishing context. Given the 
strict deadlines in the publishing in- 
dustry, questions have been raised as 
to the practicability of altering the 
work or hire doctrine in this area. 

So those comments just need to be 
said, and with that we are prepared to 
vote on the bill. 

The PRESIDING OFFICER. Who 
yields time? 

Mr. HATCH. Has the other side 
yielded back its time? 

The PRESIDING OFFICER. The 
Senator from Arizona has 10 minutes 
remaining; the Senator from Utah has 
5 minutes. 

Mr. HATCH. I am prepared to yield 
back my time if the Senator from Ver- 
mont is prepared to yield back his 
time 

Mr. LEAHY. Mr. President, I am 
prepared to yield back my time. How- 
ever, the Senator from Mississippi has 
noted that the Senator from Califor- 
nia, Senator Wilson, wishes to speak. 
The Senator from Pennsylvania, Sena- 
tor Specter, also wishes to speak on 
the bill. If we are going to yield back 
time, I would ask unanimous consent 
that their statements be allowed to be 
printed in the Record prior to the 
vote. But I am perfectly willing to do 
whatever my colleagues would like on 
the other side. It is two colleagues on 
the other side who wish to speak. I 
want to be sure, if it is possible, to give 
Senators Wilson and Specter their 
opportunity to speak. 

Mr. HATCH. Mr. President, I would 
suggest the absence of a quorum and 
see if we can get these two Senators 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28313 



the opportunity to speak; if not, then 
we will yield back. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roU. 

Mr. COCHRAN. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. COCHRAN. Mr. President, I 
yield such time as he may consume to 
the distinguished Senator from Cali- 
fornia [Mr. Wilson]. 

Mr. WILSON. Thank you, Mr. Presi- 
dent. And I thank my distinguished 
friend from Mississippi. 

Mr. President, I am very pleased 
that the Senate is moving ahead with 
legislation necessary to bring us into 
compliance with the Berne Conven- 
tion. 

The Berne Convention is the major 
international agreement on copyright 
protection. Indeed, its formal title is 
the Berne Convention for the Protec- 
tion of Literary and Artistic Works. 

American authors and artists, com- 
posers and filmmakers, photographers 
and musicians, and others who bright- 
en our lives with entertainment and 
educational works deserve to have 
their creations protected. If we fail to 
act, we will deny to these people the 
fruits of their labors. And while, un- 
doubtedly, many would continue to 
create, the lack of a fair, protected 
market for their works will certainly 
keep them from broad public dissemi- 
nation. If that occurs, then we all will 
suffer for it. 

Mr. President, our Nation has long 
protected the rights of our citizens to 
own property, both real and personal. 
We have undertaken efforts to assert 
those rights throughout the world. 
And, we have a Federal program, 
OPIC, that insures the property of 
U.S. businesses overseas. However, it is 
only in recent years that we have 
taken strong steps to protect the 
rights of our citizens in intellectual 
property— such as copyrights, trade- 
marks, patents. 

The passage of omnibus trade legis- 
lation included provisions significantly 
strengthening the protection of U.S. 
intellectual property rights. Among 
these provisions, legislation that I in- 
troduced, the Anti-Piracy and Market 
Access Act, was included in this mas- 
sive bill. This new law directs the U.S. 
Trade Representative's office to take 
an even more aggressive stance in re- 
sponding to international piracy and 
barriers to U.S. products and services 
that rely fundamentally on intellectu- 
al property protection. 

The enactment of the Berne Con- 
vention legislation now before us will 
bring to American authors and artists 

greater international protections that 

they truly deserve. With these protec- 
tions, it is hoped that we will be able 



to attain needed benefits without con- 
frontation, such as through the sec- 
tion 301 trade process or through the 
Wilson Act. 

Mr. President, I applaud the Judici- 
ary Committee for its dedication to ex- 
panding the rights of American copy- 
right holders. This is a complex sub- 
ject, and they have done a workman- 
like job. 

I especially want to commend my 
two good friends who have been lead- 
ers on this and other issues of impor- 
tance to intellectual property holders, 
Senator Hatch and Senator DeCon- 
cini. They are the ranking member 
and the chairman of the Subcommit- 
tee on Patents, Copyrights, and Trade- 
marks, and they have done outstand- 
ing work deserving of commendation 
from us all. I also want to commend 
Senator Leahy for his important work 
on this legislation. 

Also I would be remiss if I were to 
fail to commend and thank my friend 
from Mississippi, Senator Cochran, 
both for his statement this morning 
and for the work he has done in secur- 
ing needed hearings early in the next 
session on the important problem of 
work for hire. 

Mr. President, I urge passage of this 
legislation and hope to see its final en- 
actment soon. 

The ACTING PRESIDENT pro tem- 
pore. The Senator from Mississippi 
has 13 minutes remaining. 

Mr. COCHRAN. Mr. President, I 
yield such time as he may consume to 
the distinguished Senator from Penn- 
sylvania. 

The ACTING PRESIDENT pro tem- 
pore. The Senator from Pennsylvania 
is recognized. 

Mr. SPECTER. Mr. President, I 
thank my distinguished colleague 
from Mississippi. I shall not take long. 
I want to compliment my colleagues 
for moving this legislation on the 
Berne Convention forward. 

It is long past due that the Congress 
of the United States should act here 
to protect important U.S. property 
rights overseas. The reasons have been 
outlined in detail. They have come 
through the subcommittee under the 
chairmanship of the distinguished 
Senator from Arizona, Senator 
DeConcini, and ranking member, the 
distinguished Senator from Utah, Sen- 
ator Hatch. Senator Leahy also has 
contributed to this bill. 

The reasons have been articulated 
on this floor. The issues have come 
through the Judiciary Committee on 
which I sit and I think it is a very im- 
portant matter for the welfare of indi- 
vidual property rights and I urge my 
colleagues to support this bill when it 
comes up for the rollcall vote. 

I thank the Chair and yield the 
floor. 

The PRESIDING OFFICER. The 
Senator from Mississippi has 12 min- 
utes remaining. 



Mr. COCHRAN. Mr. President, is 
there other time remaining for other 
Senators under the order on the bill? 

The PRESIDING OFFICER. The 
Senator from Mississippi controls 12 
minutes. The Senator from Utah has 5 
minutes and 25 seconds, and the Sena- 
tor from Arizona, Senator DeConcini, 
has 10 minutes. The Senator from 
Vermont has 5 minutes. 

Mr. COCHRAN. Mr. President, I 
know of no other requests from Sena- 
tors who want to speak. As I under- 
stand it, the yeas and nays have been 
ordered. I would be prepared to yield 
back the remainder of time if other 
Senators would be also willing to yield 
back. 

Mr. LEAHY. If the Senator would 
yield for just a moment, I am perfectly 
willing to do that. I am able to yield 
back the time of Senator DeConcini. I 
understand from the Parliamentarian 
we have some difficulty doing what we 
originally intended to do and upon 
yielding back— I just wanted to make 
sure with the Chair I am right on 
this— we would have to have a voice 
vote first on the Leahy-DeConcini- 
Hatch amendment? And then the roll- 
call would be, then, on the bill as 
amended? Am I correct? 

The PRESIDING OFFICER. The 
Chair will state to the Senator from 
Vermont that the pending question is 
the substitute to the committee bill, 
which has not been amended by the 
Leahy-DeConcini-Hatch technical 

amendments which have already been 
adopted. The yeas and nays have been 
ordered on the passage of the bill, as 
amended. 

Mr. LEAHY. We would still have to 
have the vote on the amendment 
before we went to final passage? 

The PRESIDING OFFICER. The 
Senator is correct. 

Mr. THURMOND. Mr. President, I 
rise in support of S. 1301, the Berne 
Convention Implementation Act of 
1987. This bill amends the copyright 
law so that the United States may 
become an adherent to the Berne Con- 
vention for the Protection of Literary 
and Artistic Works. 

The Berne Convention is a multilat- 
eral copyright treaty which provides 
standards for the international protec- 
tion of copyright. Currently 76 coun- 
tries are adherents to the convention. 
However, the United States is not an 
adherent. 

In order to become an adherent to 
the convention, the copyright laws of 
a country must meet the standards 
outlined in the convention. It is gener- 
ally agreed that if the Berne Conven- 
tion is ratified, the provisions would 
not automatically become a part of 
our law or, in other words, the Berne 
Convention is not self-executing. 
Therefore, in order for the United 
States to adhere to Berne, Congress 







I 






28314 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



must make the necessary changes to 
our copyright law. 

The issue of joining the Berne Con- 
vention has been the subject of much 
discussion since the convention came 
into being in 1886, and especially since 
the copyright law was revised in 1976. 
During the last Congress, the Patents, 
Copyrights, and Trademarks Subcom- 
mittee of the Judiciary Committee 
held two hearings on this issue. In this 
Congress, the Patents Subcommittee 
also held hearings. As a result of these 
hearings, the committee approved a 
bill that takes the "minimalist" ap- 
proach. In other words, the minimum 
amount of changes were made to our 
copyright law so that we may become 
adherents to the convention. One issue 
raised during consideration by the 
committee was with regard to moral 
rights. After examination of this issue, 
the committee determined that the 
current law provides the protection re- 
quired by Berne. However, language 
was added to the bill to make it clear 
that adherence to Berne would not 
create any new rights or interests with 
regard to the issue of moral rights. 

The bill approved by the Judiciary 
Committee differs from the measure 
previously passed by the House in the 
areas of copyright registration, juke- 
box compulsory licensing, and the ef- 
fective date. I am confident that these 
differences will be worked out so that 
the Congress may pass this important 
legislation. 

Mr. President, I am pleased that the 
Senate is passing this vital measure 
which is strongly supported by the ad- 
ministration and the intellectual prop- 
erty community. Further, passage of 
this legislation will clear the way for 
the Senate to consent to the ratifica- 
tion of the Berne Convention. As a co- 
sponsor, I urge my colleagues to vote 
for this important bill. 

Mr. PELL. Mr. President, I am 
pleased to join in supporting S. 1301 
(H.R. 4262) and the Senate amend- 
ment thereto, to implement the Berne 
Convention for the Protection of Lit- 
erary and Artistic Works. 

This legislation represents a historic 
step in our efforts to provide interna- 
tional protection for copyrighted 
works. The United States has talked 
about joining the Berne Convention 
for over 100 years and today we will be 
taking a first step by amending our 
copyright laws to conform to the 
Berne standards. 

It is my hope that the final and 
formal step to joining the convention; 
namely, the advice and consent of the 
Senate on the treaty itself, will be con- 
sidered in the Senate as soon as this 
enabling legislation is approved by the 
House. 

As chairman of both the Committee 
on Foreign Relations and the Joint 
Committee on the Library, I have spe- 
cial appreciation of the need to pro- 
tect U.S. works from piracy— which 



presently costs U.S. industries billions 
of dollars annually. 

Since domestic laws must be amend- 
ed in order to adhere to this treaty, it 
is important to weigh the benefits of 
the protection it affords against the 
costs of taking this action. 

Joining Berne enables us to negoti- 
ate in the world community on copy- 
right issues important to the United 
States with other countries also party 
to the treaty, some 24 nations with 
whom we do not presently have com- 
parable multilateral relations in this 
area. And the prestige with U.S. mem- 
bership will add to Berne will hopeful- 
ly encourage other countries to join, in 
the knowledge that they will be af- 
forded high standards of protection 
and share in the benefits of the U.S. 
domesic copyright system. 

The costs of joining Berne must be 
calculated in terms of the impact of 
the implementing legislation on our 
domestic copyright system, especially 
with respect to its institutional base, 
the Library of Congress. And here I 
would assert that international copy- 
right considerations, however, impor- 
tant, cannot justify paying a price 
which would damage our viable and 
valuable copyright system, which 
plays such an important role in ex- 
panding the collections of the Library. 

Happily, the price need not be that 
high. That is why I support the "mini- 
malist approach" to joining Berne, 
making only those changes to our do- 
mestic copyright laws necessary for 
compliance with the clear obligations 
of the convention. 

One of the principal differences be- 
tween the House and Senate versions 
of the Berne implementation bill was 
over the question of whether we would 
need to change our current registra- 
tion system. From the viewpoint of 
the Joint Committee on the Library, I 
was very concerned that the bill re- 
ported from the Senate Judiciary 
Committee would have changed the 
requirement of registration of copy- 
rightable works as a precondition to 
the bringing of an infringement suit. 

I was especially mindful, too, that 
the registration process, with its com- 
panion requirement of free deposit to 
the Library of Congress of each copy- 
righted item, lies at the core of the Li- 
brary's acquisition program. 

The differences between the House 
and Senate centered on section 411(a) 
of the current law which requires a 
party bringing an infringement suit 
first to register, or attempt and be re- 
fused registration for the copyrighted 
work. 

It is apparent that there was strong 
disagreement among copyright experts 
as to whether changes to the current 
registration system would be needed in 
order to comply with Berne. The 
Senate Judiciary Committee took the 
position that it would be necessary to 
delete section 411(a). The House, how- 



ever, took the opposite view when it 
passed its version of the bill which, 
under the minimalist theory, made no 
changes to section 411(a). 

Without clear agreement on the 
issue of section 411(a), I believe it is 
the wiser course not to make changes 
other than those which are absolutely 
necessary, especially when the conse- 
quences of a change could be adverse 
to the Library of Congress and the 
copyright registry. 

I am very pleased that a compromise 
has now been worked out in the form 
of the Senate amendment which we 
are considering today, making the 
minimal changes necessary to our reg- 
istration system. I think all parties can 
agree that the changes made by this 
compromise amendment are clearly 
compatible with the Berne Conven- 
tion. Just as important, the changes 
are adapted to the unique American 
system of copyright registration so as 
to maintain with minimal disruption, 
our copyright system and our national 
library system. 

The Senate amendment, which I un- 
derstand has been agreed to by the 
House Members working on this issue, 
creates a two-tiered approach to sec- 
tion 411(a) and seems to protect all of 
the Library's interests, both as to li- 
brary acquisitions and copyright ad- 
ministration. 

The mechanics of the amendment, 
as I understand it, would work as fol- 
lows. It would exempt Berne Conven- 
tion works from the requirement of 
having to register as a prerequisite to 
filing a lawsuit. It would leave un- 
changed the requirements of registra- 
tion for authors whose works are first 
published in the United States, and 
for the unpublished works of U.S. au- 
thors. 

In these latter two cases, these au- 
thors would still have to register their 
works under section 411(a) just as 
they have to register now. The Senate 
amendment also specifies which works 
would have to be registered in the case 
of simultaneous publication in two 
countries or of unpublished works of 
authors of different nationalities. 

I ask the distinguished Senator from 
Arizona, who is chairman of the Sub- 
committee on Patents, Copyrights and 
Trademarks and who also serves on 
the Joint Committee on the Library, if 
I have correctly described the amend- 
ment. 

Mr. DeCONCINI. The Senator has 
correctly stated the thrust of the 
Leahy-DeConcini-Hatch amendment. 
For example, it would not change the 
current registration system for works 
of any author whose works were first 
published in the United States, or sub- 
ject to certain conditions, to works 
first published here and abroad, or for 
unpublished works of U.S. authors. It 
would exempt from the registration 
requirements works which are first 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28315 



published in other Berne Convention 
countries or for unpublished works of 
nationals of Berne Convention coun- 
tries other than the United States. 

As you have described, there are spe- 
cial rules set out for works simulta- 
neously published in two countries one 
of which is the United States or by 
more than one author where one of 
the authors is a U.S. national, domicil- 
iary or resident. 

Mr. PELL. Mr. President, I under- 
stand that the distinguished Senator 
from Vermont, as a member of the 
Subcommittee on Patents, Copyrights 
and Trademarks, fully supports the 
two-tiered approach, and I wonder if 
he would care to comment on my con- 
cern that we maintain the current reg- 
istration system at least for domestic 
works, for the reasons I have outlined. 

Mr. LEAHY. Mr. President, I agree 
with my colleague that we need to 
maintain a comprehensive registration 
system to keep a public record of regis- 
trations, to preserve and protect our 
national library system today and in 
the future and to promote efficiency 
in our courts. I would add that, in the 
Judiciary Committee's view, as de- 
tailed in the report on S. 1301, these 
important interests would not have 
been harmed by elimination of the sec- 
tion 411(a) requirement as a whole. 
But sharing with Senator Pell strong 
support for the Library, I believe this 
compromise should dispell any linger- 
ing anxieties. 

As we stated in our committee report 
on the Berne Convention Implementa- 
tion Act, we agree with the Copyright 
Office that the present system of reg- 
istration benefits all participants in 
the copyright system, as well as the 
general public. We agreed that the 
system provides a useful public record 
and an efficient acquisition system for 
the Library of Congress. 

While we are making changes in the 
system for other Berne Convention 
published works or authors, we need 
not change the system for works of 
U.S. origin— that is, generally speak- 
ing, works first published in this coun- 
try or by U.S. authors. 

In addition, we have maintained and 
strengthened the other current incen- 
tives for registration for all works, in- 
cluding registration as a prerequisite 
to the awarding of statutory damages 
and attorneys' fees in infringement ac- 
tions. In fact, we have doubled the 
level of statutory damages for in- 
fringement of registered works, which 
should increase the incentives for reg- 
istration. In addition, we have not 
changed the section 410 provisions 
providing for prima facie evidentiary 
results in infringement actions. Be- 
cause of these incentives, and because 
of the advantages in registering, I an- 
ticipate that there will be no changes 
in registrations of domestic works and 
very few if any changes in the regis- 
tration of foreign works. 



Mr. PELL. In view of the possibility, 
hopefully remote, that the Library of 
Congress could be faced with some 
added costs in acquiring foreign works, 
I am wondering if the distinguished 
Senator from Arizona, as a member of 
the Appropriations Committee, can 
keep a watchful eye on this situation 
so that the Library will not find itself 
in a financial shortfall, unable to ac- 
quire such works. 

Mr. DeCONCINI. As the Senator 
knows, I am not in a position to make 
any binding commitments to my col- 
league, but I can assure the chairman 
of the Joint Committee on the Library 
that we on the Appropriations Com- 
mittee would look at how the changes 
imposed by this bill today affected the 
financial status of the Library. I would 
not anticipate any other costs to the 
Library than what was estimated by 
the Congressional Budget Office in 
the House bill, because I believe the 
two-tier amendment would be closer to 
the House than the Senate in its cost 
implications of the Library's acquisi- 
tions, with the exception of certain 
foreign deposits. In this area, certainly 
we would not want the Library, which 
I too, as a member of the Joint Com- 
mittee on the Library, am very con- 
cerned about, to experience any unex- 
pected lost revenues as a result of the 
United States joining Berne. I agree 
with your analysis that when we 
weigh the costs of joining Berne in the 
private and public sectors, against the 
benefits, that it is something we want 
to do. But I do not expect, and would 
not want the Library of Congress nor 
the Copyright Office to bear, any un- 
anticipated costs in our adherence to 
the Berne Convention, especially if it 
meant that by adopting our amend- 
ment on two-tier, the Library's acquisi- 
tions were to drop off significantly. 

Mr. PELL. I thank the Senators for 
their very helpful responses and in 
view of their assurances, I ask unani- 
mous consent that my name be added 
as a cosponsor of the bill. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. SIMPSON. Mr. President, I rise 
to join with my colleagues on the Judi- 
ciary Committee to urge Senate pas- 
sage of the Berne implementation bill. 

This legislation will make possible 
the United States' joining the Berne 
Convention, which will provide signifi- 
cant additional international protec- 
tion of our exported copyrighted 
works. Because we are the leading ex- 
porter of copyrights, it is clearly in the 
national interest to become a part of 
the Berne union and enjoy "national 
protection" for our copyrights in the 
other countries that are members of 
Berne. 

A broad, diverse array of groups sup- 
ported this bill as it moved through 
the Judiciary Committee, and a bipar- 
tisan coalition on the committee 
emerged in response. While difficult 



issues arose, they were equitably and 
sensibly addressed. In particular, I 
would like to commend Senators 
Leahy, DeConcini, and Hatch for the 
processing of the legislation. 

Mr. President, I am a cosponsor of 
the legislation, I believe it will serve 
our creative people and our Nation 
well, and I urge my colleagues to give 
it their approval. 

Mr. LEAHY. Mr. President, I yield 
back my time and Senator DeCon- 
cini's time. 

Mr. HATCH. Mr. President, I yield 
back my time. 

Mr. COCHRAN. I yield back my 
time. 

The PRESIDING OFFICER. The 
Senator from Kansas. 

Mr. DOLE. Mr. President, let me, by 
unanimous consent, indicate we have a 
very important luncheon today in SR- 
325 honoring our majority leader. I 
urge all my colleagues after the vote 
to head for SR-325. 

The PRESIDING OFFICER. The 
question is on agreeing to the commit- 
tee amendment, as amended. 

The committee amendment, as 
amended, was agreed to. 

Mr. LEAHY. Mr. President, I move 
to reconsider the vote by which the 
committee amendment, as amended, 
was agreed to. 

Mr. HATCH. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

The PRESIDING OFFICER. The 
clerk will report the bill for a third 
time. 

The bill was ordered to be engrossed 
for a third reading and was read the 
third time. 

The PRESIDING OFFICER. The 
bill having been read a third time, the 
question is, Shall it pass? The yeas and 
nays have been ordered. 

The clerk will call the roll. 

The legislative clerk called the roll. 

Mr. CRANSTON. I announce that 
the Senator from Texas [Mr. Bent- 
sen], the Senator from Florida [Mr. 
Chiles] and the Senator from Illinois 
[Mr. Simon] are necessarily absent. 

Mr. SIMPSON. I announce that the 
Senator from Minnesota [Mr. Bosch- 
witz], the Senator from New York 
[Mr. D'Amato], the Senator from Min- 
nesota [Mr. Durenberger], the Sena- 
tor from New Hampshire [Mr. Hum- 
phrey], the Senator from Nebraska 
[Mr. Karnes], the Senator from Indi- 
ana [Mr. Quayle] and the Senator 
from Connecticut [Mr. Weicker] are 
necessarily absent. 

I further announce that, if present 
and voting, the Senator from Minneso- 
ta [Mr. Durenberger] and the Senator 
from Connecticut [Mr. Weicker] 
would each vote "yea." 

The PRESIDING OFFICER (Mr. 
Shelby). Are there any other Senators 
in the Chamber who desire to vote? 



19-059 0-89-2 (Pt. 20) 



28316 

The result was announced- 
nays 0, as follows: 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



-yeas 90, 



[Rollcall Vote No. 350 Leg.] 



Adams 

Armstrong 

Baucus 

Biden 

Bingaman 

Bond 

Boren 

Bradley 

Breaux 

Bumpers 

Burdick 

Byrd 

Chafee 

Cochran 

Cohen 

Conrad 

Cranston 

Danforth 

Daschle 

DeConcini 

Dixon 

Dodd 

Dole 

Domenici 

Evans 

Exon 

Ford 

Fowler 

Garn 

Glenn 



Bentsen 
Boschwitz 
Chiles 
D'Amato 



YEAS-90 

Gore 

Graham 

Gramm 

Grassley 

Harkin 

Hatch 

Hatfield 

Hecht 

Heflin 

Heinz 

Helms 

Hollings 

Inouye 

Johnston 

Kassebaum 

Kasten 

Kennedy 

Kerry 

Lautenberg 

Leahy 

Levin 

Lugar 

Matsunaga 

McCain 

McClure 

McConnell 

Melcher 

Metzenbaum 

Mikulski 

Mitchell 



Moynihan 

Murkowski 

Nickles 

Nunn 

Packwood 

Pell 

Pressler 

Proxmlre 

Pryor 

Reid 

Riegle 

Rockefeller 

Roth 

Rudman 

Sanford 

Sarbanes 

Sasser 

Shelby 

Simpson 

Specter 

Stafford 

Stennis 

Stevens 

Symms 

Thurmond 

Trible 

Wallop 

Warner 

Wilson 

Wirth 



NOT VOTING— 10 



Durenberger 
Humphrey 
Karnes 
Quayle 



Simon 
Weicker 



So the bill (S. 1301), as amended, 
was passed. 

Mr. LEAHY. Mr. President, I move 
to reconsider the vote by which the 
bill, as amended, was passed. 

Mr. MELCHER. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. LEAHY. Mr. President, I ask 
unanimous consent that the remain- 
der of the order be executed. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. LEAHY. Mr. President, I thank 
all Senators as I have earlier, on both 
sides of the aisle who made this histor- 
ic piece of legislation possible. 

I yield the floor. 



that, but perhaps that is what it will 
take. 

This body runs best, I contend, Mr. 
President, when it is run in a spirit of 
compromise, and we have had compro- 
mise from the other side. They are 
willing to move ahead on a drug bill, 
they are willing to move ahead on a 
technical corrections bill, and they are 
not willing to move ahead on these 
other bills. As much as I support 
them, it seems to me, Mr. President, 
we would be much better off not to go 
out in a heat of temper, a heat of 
agony. We have a great record on 
which we can all stand. It so happens, 
Mr. President, the other night when I 
was denied by the majority leader of 
the right to have a rollcall vote, it 
flashed through my mind that, well, 
let us get tough and mean and nasty 
and let us just keep everybody here 
and not let the majority leader have 
the sterling record that I know he 
wanted very badly where he could pass 
all appropriations bills, but this Sena- 
tor put that aside in a spirit of not 
wanting to be mean to anybody and 
not wanting to leave an impression 
that I was not willing to cooperate. 

I think it is important that we on 
the Democratic side find a way to ad- 
journ this session in a spirit of what 
this institution is all about. It is not 
about fighting and bad feelings. It is 
about accomplishments and the cama- 
raderie that exists on both sides of the 
aisle. So it is my best wish that we 
should take demonstrative steps by 
passing a drug bill and go home. 

Mr. BYRD addressed the Chair. 

The PRESIDING OFFICER. The 
Chair will inform the majority leader 
that the order remains to be executed. 

Mr. BYRD addressed the Chair. 

The PRESIDING OFFICER. The 
majority leader is recognized. 

Mr. BYRD. Mr. President, I yield for 
the purpose of further execution of 
the order. 



TIME TO ADJOURN 
Mr. DeCONCINI. Mr. President, I 
think it would be wise for us to get out 
of here, as the minority leader has 
said. It seems to me that these bills 
that are pending, as important as they 
are— and I happen to be a cosponsor 
and support all three of them, paren- 
tal leave, child pornography and the 
ABC child-care bill— have been around 
a long time. There is no reason they 
could not have been brought up 
sooner. Our job is not to stay here and 
do legislative work. We have done 
that. Our job, Mr. President, is to rep- 
resent our people, to go home. And if 
it is necessary, as the majority leader 
thinks it is, to stay in session, perhaps 
we have to come back. That is the 
nature of this job. Nobody wants to do 



IMPLEMENTATION OF THE 

BERNE CONVENTION FOR THE 

PROTECTION OF LITERARY 

AND ARTISTIC WORKS 

The PRESIDING OFFICER. Pursu- 
ant to the previous order, the Senate 
will proceed to the consideration of 
H.R. 4262, which the clerk will report. 

The assistant legislative clerk read 
as follows: 

A bill (H.R. 4262) to amend Title 17, 
United States Code, to implement the Berne 
Convention for the Protection of Literary 
and Artistic Works, as revised at Paris on 
July 24, 1971, and for other purposes. 

The Senate proceeded to consider 
the bill. 

The PRESIDING OFFICER. Under 
the previous order, all after the enact- 
ing clause of H.R. 4262 is stricken, and 
the text of S. 1301 is inserted in lieu 
thereof. 



Mr. LEAHY. Mr. President, the 
amendment now before the Senate 
simply takes the text of S. 1301, the 
Senate bill to implement the Berne 
Convention, which we have just 
passed, and substitutes it for the text 
of the Berne bill passed by the House, 
H.R. 4262. 

Since the text of this amendment is 
identical to the measure we have just 
passed, my remarks about S. 1301 are 
equally applicable to H.R. 4262. This 
applies as well to the explanatory ma- 
terial which I inserted in the record 
during our consideration of S. 1301. 

Mr. President, I believe that this 
amendment is acceptable on both sides 
of the aisle. I urge my colleagues to 
support it and to send this measure 
back to the other body, which I antici- 
pate will concur in it promptly. 

Mr. President, as I noted previously, 
many Senators have contributed to 
the work on this important legislation. 
Once again, I would like to thank the 
chairman of the Subcommittee on 
Patents, Copyrights and Trademarks, 
Senator DeConcini; the ranking 
member of the subcommittee, Senator 
Hatch; and our committee chairman, 
Senator Biden, whose efforts have 
made possible today's action by the 
Senate to bring U.S. copyright law 
into harmony with the Berne Conven- 
tion. I also thank the majority and mi- 
nority leaders for their cooperation in 
scheduling time on the Senate floor 
for consideration of the Berne Con- 
vention Implementation Act of 1988. 
Let me offer my thanks to the chair- 
man of the Foreign Relations Commit- 
tee, Senator Pell, and pledge my sup- 
port to him in bringing to this floor 
the resolution of ratification of the 
treaty establishing the Berne Union, 
which is now pending on the Execu- 
tive Calendar. Once we have ratified 
that treaty, the congressional process, 
for bringing the United States into the 
Berne Convention will be complete. 

The PRESIDING OFFICER. The 
question is on the engrossment of the 
amendment and the third reading of 
the bill. 

The amendment was ordered to be 
engrossed and the bill to be read a 
third time. 
The bill was read the third time. 
The PRESIDING OFFICER. The 
bill having been read the third time, 
the question is, Shall it pass? 

The bill (H.R. 4262), as amended, 
was passed. 

Mr. LEAHY. Mr. President, I move 
to reconsider the vote by which the 
bill was passed. 

Mr. DOLE. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 
Mr. BYRD addressed the Chair. 
The PRESIDING OFFICER. The 
majority leader is recognized. 



October 5, 1988 

ORDER OF PROCEDURE 

Mr. BYRD. Mr. President, an order 
was entered on yesterday providing for 
the voting in sequence beginning at 2 
p.m. today on the second-degree 
amendment to the first-degree amend- 
ment to the motion to recommit with 
instructions to report back, and with- 
out debate, motion, or amendment oc- 
curring between those votes. 

The distinguished Republican leader 
has indicated to me that he would be 
willing to proceed by a voice vote on 
those matters now, and then there is a 
desire to recess until 2 p.m. 

If no other Senator wishes to insist 
on a rollcall vote, we can proceed with 
the voice voting of those three matters 
right now. 

Mr. WIRTH. Mr. President, before 
we recess, Senator Heinz and I would 
like to be recognized, and have the 
floor so that we might have a 15- 
minute time period to speak. 

Mr. BYRD. Very well. 



CONGRESSIONAL RECORD— SENATE 



28317 



The Senate resumed consideration 
of the bill. 

The PRESIDING OFFICER. The 
question is on the second-degree 
amendment. 

The amendment (No. 3310) was 
ELtrrcscl to. 

The PRESIDING OFFICER. The 
question is now on the first-degree 
amendment, as amended. 

The amendment (No. 3309) was 
agreed to. 

The PRESIDING OFFICER. The 
question is now on agreeing to the 
motion to recommit. 

The motion was agreed to. 

The amendment (No. 3308) was 

3,£T66Cl tO 

Mr. BYRD. Mr. President, I ask 
unanimous consent that a motion to 
reconsider en bloc be laid on the table. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 



UNANIMOUS-CONSENT 
AGREEMENT 

Mr. BYRD. Mr. President, I ask 
unanimous consent that the Senate 
now proceed with the order which was 
otherwise to begin at 2 p.m. today. I 
see no Senator asking for a rollcall 
vote. I hear no Senator indicating that 
it is the intention to ask for a rollcall 
vote. 

I, therefore, ask unanimous consent 
that immediately upon the disposition 
of the three matters, the last being 
the motion to recommit with instruc- 
tions, immediately upon the disposi- 
tion of that vote, that the Senate go 
into morning business; that the time 
not exceed 15 minutes for morning 
business; that Senators be permitted 
to speak therein for not to exceed 5 
minutes each; and, that the Senate 
then stand in recess until the hour of 
2 p.m. today. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 



PARENTAL AND TEMPORARY 
MEDICAL LEAVE 

The PRESIDING OFFICER. The 
clerk will report. 

The assistant legislative clerk read 
as follows: 

A bill (S. 2488) to grant employees paren- 
tal and temporary medical leave under cer- 
tain circumstances, and for other purposes. 

The Senate resumed consideration 
of the bill. 

Pending: 

(1) Byrd motion to recommit the bill, with 
instructions to report back forthwith, with 
an amendment, as contained in Byrd 
Amendment No. 3308, in the nature of a 
substitute. 

(2) Byrd Amendment No. 3309, in the 
nature of a substitute for the instructions. 

(3) Byrd Amendment No. 3310 (to Amend- 
ment No. 3308), of a perfecting nature. 



MORNING BUSINESS 

The PRESIDING OFFICER. Under 
the previous order, there will now be a 
period for morning business not to 
exceed 15 minutes. 

Mr. WIRTH addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Colorado is recognized. 

Mr. HEINZ. Mr. President, the 
Senate is not in order. 

The PRESIDING OFFICER. The 
Senator is correct. If the Senator from 
Colorado will withhold, the Senate is 
not in order. 

Members will take their seats and 
clear the aisles. 

The Senator from Colorado is enti- 
tled to be heard. 

The Senator from Colorado is recog- 
nized. 

Mr. WIRTH. Mr. President, I thank 
the Chair. I thank my colleague from 
Pennsylvania. 



"PROJECT 88" 

Mr. WIRTH. Mr. President, today, 
my colleague from Pennsylvania, Sen- 
ator Heinz and I are releasing the 
draft of a report on the tough environ- 
mental problems this Nation must 
deal with in the next administration, 
and we outline new approaches to solv- 
ing those problems. 

The theme of this report entitled 
"Project 88," is simple— that the forces 
that spur innovation, investment, and 
initiative in our economy can be 
brought to bear on solving our envi- 
ronmental problems, and that bold ini- 
tiatives to do this need to be set out 
now. 

The purpose of the report is to set 
the stage for these issues to be dis- 
cussed by the Presidential candidates, 
and to be used by the new administra- 
tion—whether Democratic or Republi- 
can. 

No matter which candidate wins, 
they will be faced with tough environ- 



mental problems. Our cities have 
record-high air pollution. We have 
hardly started dealing with toxic 
waste sites across the country. We 
have been unable to come to grips 
with acid rain. And we face new 
threats that we are just beginning to 
understand the seriousness of, in the 
form of ozone depletion and global 
warming. 

We are going to need every tool we 
can get to deal with these problems. 
This report sets out some of those 
that John Heinz and I think are worth 
adding to our arsenal. 
Our recommendations include: 
Using "tradable emission permits" to 
get market forces to work in reducing 
pollution. Instead of dictating a par- 
ticular solution, we set out an environ- 
mental goal— and let industry compete 
in an open market to meet it. For ex- 
ample, tradable permits could allow us 
to have an orderly phaseout of the 
CFC's that are causing the ozone hole 
in the stratosphere— and that are 
major contributors to global warming. 
Auctioning the permits would enable 
us to capture what might otherwise be 
windfall profits reaped by manufactur- 
ers as CFC production is turned 
down— and use that money to fund 
further programs for reducing and re- 
placing CFC's. 

Recognizing economic forces that 
are now ignored. For example, the 
Federal Government's decisions on 
how to manage millions of acres of our 
national forests now emphasize in- 
creasing the Forest Service's budget 
and its cash receipts. That emphasizes 
timber cutting, but downplays recrea- 
tion—which in many parts of Colorado 
is the biggest and most important part 
of our local ecomony, even though it 
may produce few cash receipts for the 
agency. A sensible policy would give 
more recognition to the growing im- 
portance of recreation and environ- 
mental values in our forests, and those 
environmental values related to that 
focused on such economic activities 
such as hunting, fishing, rafting, and 
so on. 

Opening up markets to environmen- 
tally preferable alternatives. For ex- 
ample, "conservation contractors" who 
can free up power by saving it should 
be able to bid to meet a utility's need 
for additional electric power, rather 
than restricting bidding on power 
supply to new powerplants. 

Recognizing areas where one action 
helps to solve more than one problem. 
For example, a higher gas mileage re- 
quirement for automobiles is essential 
to lowering carbon dioxide emissions, a 
key to fighting global warming. But it 
also reduces oil imports, helps our bal- 
ance of trade, and reduces pressure to 
drill for oil in environmentally sensi- 
tive areas. 

The report also recognizes that their 
economic approaches are not a pana- 







28318 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



cea for environmental problems. Some 
problems need uniform, national solu- 
tions. Auto emission is one such area. 
There simply may not be a better way 
to reduce auto emissions than to tell 
the manufacturers they must do so. 

But we are suggesting there is a mix 
of the so-called regulatory, or com- 
mand and control approach to envi- 
ronmental problems— to mix those in 
with the use of the marketplace and 
economic incentives. The size and 
scope of the problems that we are 
about to deal with are coming up for 
us for the remainder of this decade, 
and well into the next century. Those 
problems are not going to be addressed 
simply by a regulatory approach down 
at EPA. 

We are going to have to be creative, 
we are going to have to think how fi- 
nancial incentives can be used, how 
the discipline of the marketplace can 
be used, and "Project 88," the report 
that Senator Heinz and I released 
today, is an attempt to begin this way 
of thinking, and to begin to focus the 
country on a different way of ap- 
proaching our environmental issues. 

Our endorsement of getting the 
economy to work for the environment 
does not mean that we intend to let 
economic factors set our environmen- 
tal standards. We cannot and we 
should not let cold calculations about 
cost stop us from insisting on high 
standards for the protection of human 
life and a quality environment. 

We think that the ideas in this 
report are good ones. We hope that, if 
nothing else, this report helps get the 
Presidential candidates thinking about 
new ways to help the environment. 

Mr. President, I ask unanimous con- 
sent to print after the remarks of the 
distinguished Senator from Pennsylva- 
nia the forward of Project 88; chapter 
1, the executive summary and intro- 
duction, and a summary of the major 
recommendation, and that those be in- 
cluded in full in the Record after the 
remarks of the Senator from Pennsyl- 
vania. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 
(See exhibit 1.) 
Mr. WIRTH. I yield the floor. 
The PRESIDING OFFICER. The 
Senator from Pennsylvania. 

Mr. HEINZ. Mr. President, as my 
friend, the Senator from Colorado, 
Senator Wirth, mentioned he and I 
are today releasing our report, Project 
88, and we are releasing it because at 
least in my judgment we are in a war 
for a safer, cleaner environment and 
the environment is losing. That's why 
we need to harness incentives and 
market forces in the battle. The strat- 
egies which Senator Wirth and I have 
outlined in Project 88 will help our 
Nation move further, faster, at far less 
cost. 

And I do not believe we can afford to 
fail in this challenge because our own 



health and safety, and even more im- 
portantly, that of our children and 
grandchildren will directly depend on 
the choices made today and in the 
next few years. 

It occurs to me that being for a 
clean environment is very much like 
going to heaven. It is something that 
everybody is for, but there are too 
many people who do not want to do 
what they have to do in order to get 
there. 

Because our environmental problems 
are growing more complex and diffi- 
cult to solve and because the easy deci- 
sions have all been made, there is a 
limit to what current thinking about 
the environment can achieve and the 
traditional command and control 
strategies which we have been used to 
for the last 15 years often impose un- 
necessarily high costs in our economy 
and our international competitiveness. 
They are often politically very diffi- 
cult and now unachievable, as well. 

What our report demonstrates is 
that we can do better. It illustrates al- 
ternative and supplemental market- 
oriented strategies that can greatly 
reduce the cost of reaching our envi- 
ronmental goals, while providing us 
with the cleanup that is so urgently 
needed. Senator Wirth and I are re- 
leasing the first draft of this report 
now, before the election, because we 
do not believe the issue can wait. The 
next President, whoever is chosen, is 
going to have to move from analysis to 
action before this inauguration. Presi- 
dential campaigns and Presidential 
transitions are about setting goals. 
Both candidates have campaigned for 
a cleaner environment. We hope our 
report will be a roadmap on ways to 
achieve that goal through an ap- 
proach that relies as much or more on 
incentives and market forces as it does 
on traditional command and control. 

At the same time, while Senator 
Wirth and I believe strongly that pro- 
posals made in this report are sound, 
there will be debate and discussion, we 
are sure, about each and every recom- 
mendation in it. 

We particularly hope, and that is 
why we bring them forward for public 
review and debate at this time, that 
they will stimulate discussion in the 
Presidential campaign in the coming 
Presidential debate and in the other 
campaigns that are taking place this 
year. 

The issues that we discuss in this 
report, global warming, toxics, ozone 
depletion, solid waste management, 
acid rain, ground water contamination 
and issues that go even further are 
issues that will not go away. We pro- 
pose new methods to mitigate the en- 
vironmental damage resulting in each 
category. 

Mr. President, just a few days ago, 
we had an example of a bad environ- 
mental decision, the decision to once 
again ignore the original corporate 



automobile fuel efficiency standards 
that were set which would have, had 
they remained in effect, encouraged 
Detroit to meet a 26.5-mile-per-gallon 
standard at the coming year. 

This report, I think, demonstrates 
why we need to maintain good, strong 
performance-oriented standards in a 
way that encourages the marketplace 
to meet them without imposing specif- 
ic methods of meeting those stand- 
ards. 

It is our belief that Project 88 will 
not only help head off any kind of un- 
justifiable policy decision in the 
future, but will permit all in the politi- 
cal process to set more ambitious goals 
which in my judgment and the judg- 
ment of my colleague, Senator Wirth, 
we must have if we are to meet our re- 
sponsibility to leave to our children a 
world that is safer and cleaner than 
the one we face today. 

Mr. President, I yield the floor. 
Exhibit 1 

Foreword by Senator Timothy E. Wirth 

and Senator John Heinz 
The United States and countries around 
the globe face a series of difficult and in- 
creasingly dangerous environmental chal- 
lenges—from global warming to hazardous 
waste disposal. This election year presents 
us with a unique opportunity to commit the 
country to bold, new programs for protect- 
ing natural resources, the environment, and 
public health. These issues continue to rank 
high among the priorities of Americans of 
all political persuasions, and so the next 
President will have the opportunity to forge 
a strong bipartisan consensus in favor of 
sensible environmental protection, wise use 
of natural resources, and protection of the 
public's health. It is imperative that plans 
for such programs be developed now. We 
cannot wait until after the election; we need 
to act now to make these issues, and these 
proposals, part of the election debate, and 
to lay the foundation for the new Adminis- 
tration's activities starting on January 21, 
1989. 

Project 88 is a bipartisan effort to identify 
major environmental and natural resource 
problems which face us and to develop inno- 
vative policy responses to address these 
challenges. Three themes have been pur- 
sued throughout; first, to focus on how best 
to achieve environmental goals; second, to 
find common ground among solutions; and 
third, to recognize and— where appropri- 
ate—utilize market forces. 

We hope that this report stimulates dis- 
cussion; in that regard, we seek to pose 
questions, not to provide definitive answers. 
Although we do not necessarily endorse 
each and every idea presented here, and 
might take exception to some, we believe 
that these ideas warrant serious consider- 
ation and debate by the Presidential candi- 
dates and, for that matter, by all who are 
concerned about the environmental and eco- 
nomic health of our society. 

Why have we emphasized in our investiga- 
tions market-based approaches to environ- 
mental problems? The answer is that al- 
though incentive-based policies will by no 
means provide answers to all of our environ- 
mental problems, such innovative approach- 
es merit consideration as supplements to 
conventional regulatory methods. By aug- 
menting our current policies selectively with 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28319 



economic-incentive approaches, we may be 
able to achieve our environmental goals 
more effectively and at reasonable cost. 
Lower costs mean less resistance to stronger 
environmental protection, something which 
the American people clearly desire. By en- 
gaging the innovative capacity of our indus- 
try, incentive-based approaches hold the 
promise of providing more environmental 
protection per dollar of control effort. At 
the same time, the next Administration 
should not be deceived into believing that 
environmental protection can be achieved 
without incurring significant costs. The 
challenge is to build upon the public's com- 
mitment to these issues by adopting a set of 
sensible and effective policies. 

To carry out this program, we arranged 
for the staff effort to be led by Dr. Robert 
Stavins, an economist and faculty member 
at Harvard University's John F. Kennedy 
School of Government, and an associate of 
its Energy and Environmental Policy 
Center. Dr. Stavins, a specialist in natural 
resource and environmental policy, with 
broad experience at the Giannini Founda- 
tion, the Environmental Defense Fund, and 
as a Peace Corps volunteer, worked with a 
team of experts on environmental and natu- 
ral resource policy from across the country. 
A preliminary version of the report was re- 
viewed by more than fifty persons from aca- 
demia, private industry, environmental or- 
ganizations, and government. We owe a sub- 
stantial debt to all of these reviewers, but 
none should be held responsible for any re- 
maining errors or omissions. 

CHAPTER 1— EXECUTIVE SUMMARY AND 
INTRODUCTION 

As we approach the last decade of the 
twentieth century, the United States and 
countries around the world are facing a 
series of increasingly difficult and perilous 
environmental challenges: from global cli- 
mate change to widespread indoor air pollu- 
tion; from stratospheric ozone depletion and 
acid rain to urban smog; from infectious 
wastes washing up on our shorelines to in- 
visible contamination of our underground 
water supplies; from the degradation of our 
public lands to the sedimentation of our 
streams. 

This country's environmental and natural 
resource policies — assembled over a twenty- 
year period— need to be enforced and ex- 
panded. Our existing laws and regulations 
appear incapable on their own of handling 
some remaining, unsolved environmental 
problems, and they may be less adequate for 
dealing with the new threats we will face in 
the 1990s. This is happening at a time when 
the Federal government is experiencing its 
greatest budgetary deficits in history— a 
time when it is less and less likely that we 
can increase environmental protection 
simply by spending more money on existing 
programs and policies. Furthermore, we 
need to enlist the nation's entrepreneurial 
creativity on behalf of more inventive and 
efficient approaches to environmental pro- 
tection. The time has come to develop fresh, 
innovative, and most importantly, effective 
approaches, to address both old, seemingly 
intractable environmental problems, and 
grave, new ones. 

A new sense of urgency is needed to begin 
meeting these massive challenges, and this 
election year presents us with a unique op- 
portunity to commit the country to aggres- 
sive programs for protecting natural re- 
sources, the environment, and public 
health. Because these issues continue to 
rank high among the priorities of Ameri- 
cans of all political persuasions, the next 



President will have the opportunity to forge 
a strong bipartisan consensus in favor of 
sensible environmental protection, wise use 
of natural resources, and protection of the 
public's health. 

This report describes the findings of 
Project 88, an enterprise designed to set out 
innovative solutions to major environmental 
and natural resource problems facing the 
United States. We have tried to pursue 
three themes throughout: (1) focusing not 
on identifying specific environmental goals, 
but on how best to achieve whatever goals 
are established; (2) finding common ground 
among solutions; and (3) recognizing and, 
where appropriate, utilizing market forces. 
The report addresses sixteen major environ- 
mental and natural resources problems, and 
for each recommends specific new policies- 
including innovative approaches which tend 
to rely more on decisions by individual citi- 
zens brought about by appropriate econom- 
ic incentives. We believe that this approach 
has the potential to engage the innovative 
capacity of American industry and individ- 
uals in the development of efficient and eq- 
uitable solutions to our environmental and 
natural resource problems. 

In this first chapter, we begin by sketch- 
ing the fundamental background of environ- 
mental and economic conditions, public 
opinion, and current policy. Then we ex- 
plain how we evaluated alternative policy 
approaches to environmental problems. 
Next, we describe common threads running 
through our recommendations and some of 
their major implications. Finally, we briefly 
summarize our recommendations for major 
environmental and natural resource prob- 
lems. 

THE CONTEXT OF PROJECT 88: ENVIRONMENTAL 
AND ECONOMIC CONDITIONS, PUBLIC OPINION, 
AND CURRENT POLICY 

The publication of Rachel Carson's 
"Silent Spring" ' in 1962 crystallized the 
opinions of many individuals who believed 
that the nation's unparalleled economic 
growth in the post-war years had not come 
without severe social costs. It was not until 
the 1970 celebration of Earth Day, however, 
that it became clear how widespread were 
concerns about the state of the natural en- 
vironment. Only two months later, Presi- 
dent Richard Nixon proposed to Congress 
the establishment of the U.S. Environmen- 
tal Protection Agency (EPA); and what has 
since been called the "environmental 
decade" began. During the subsequent ten 
years, a host of broad-reaching environmen- 
tal laws were enacted by the Congress: the 
National Environmental Policy Act of 1970; 
the Occupational Safety and Health Act of 
1970; the Clean Air Act Amendments of 
1970 and 1977; the Clean Water Act of 1972; 
the Federal Insecticide, Fungicide, and Ro- 
denticide Act of 1972; the Forest and Range- 
land Renewable Resources Planning Act of 
1974; the Toxic Substances Control Act of 
1976; the Resource Conservation and Recov- 
ery Act of 1976; and the Comprehensive En- 
vironmental Response, Compensation, and 
Liability Act of 1980. Through these laws 
and subsequent regulations, the Federal 
government assumed an increasingly large 
and vigorous role in protecting and improv- 
ing the environment. 

Environmental conditions and 
conventional policy responses 
In the early days of environmental legisla- 
tion, the sources of pollution were easy to 



identify, and relatively easy to control. The 
early environmental problems were obvious 
and the legislative solutions were frequently 
effective. Industrial sources of large and 
visible pollutants were the major target, and 
the new regulatory structure did the job 
rather well: in many spheres, the environ- 
ment is cleaner now than if was then, de- 
spite a considerable amount of economic 
growth during the intervening years. 

Now, environmental policy is at an impor- 
tant juncture. Having taken care of the rela- 
tively easy problems first, we face sources of 
pollution which are more difficult— and 
more costly— to control. Furthermore, there 
are major environmental problems with 
which we have not yet successfully dealt. 
Lastly, there are new environmental prob- 
lems facing us which are absolutely enor- 
mous in their dimensions and which were 
not even considered by previous policies- 
such as global climate change caused by the 
greenhouse effect, and stratospheric ozone 
depletion. 2 

Public opinion 
Public opinion polls consistently show 
that public concern over environmental 
quality has remained strong during energy 
crises, economic downturns, and tax re- 
volts. 3 Indeed, public opinion analysts de- 
scribe environmental quality as an "endur- 
ing concern of the American public." 4 Nu- 
merous polls, including ones conducted by 
CBS News/New York Times, Roper, and 
Harris, all indicate that the level of support 
for environmental protection has consist- 
ently increased over the past fifteen years. 5 
Recent awareness of ocean pollution, strato- 
spheric ozone depletion, and the threat of 
global climate change have led to even 
higher levels of public concern about envi- 
ronmental quality issues. 

Economic conditions and budgetary 
realities 
Despite a sustained period of economic 
growth, the nation faces current and antici- 
pated deficits in the Federal budget and in 
the nation's balance of trade. Neither prob- 
lem augurs well for conventional approach- 
es to environmental protection. Growing 
concern with massive accumulations of na- 
tional debt will likely constrain Federal ex- 
penditures of all kinds, including those for 
environmental protection and natural re- 
source management. It is unlikely that we 
will see dramatic increases in Federal ex- 
penditures in the next few years, 6 although 



1 Carson, Rachel L. "Silent Spring." 
Houghton Mifflin Company, 1962. 



2 A discussion of future environmental challenges 
is provided by: Russell, Milton. "Environmental 
Protection for the 1990s and Beyond." Environ- 
ment 29(1 987): 12-38. 

3 Dunlap, Riley E. "Polls, Pollution, and Politics 
Revisited: Public Opinion on the Environment in 
the Reagan Era." Environment 29<1987):7-37. 

4 Ladd, E. C. "Clearing the Air: Public Opinion 
and Public Policy on the Environment." Public 
Opinion, February/March 1982, pp. 16-20. 

5 Lamm, Richard D. and Thomas A. Barron. "The 
Environmental Agenda for the Next Administra- 
tion." Environment 30(1988): 17-29. 

6 Federal expenditures for all environmental and 
natural resource programs in 1985 were about $13.4 
billion (1.4% of all Federal outlays). See: (1) U.S. 
Office of Management and Budget. "Budget of the 
U.S. Government, Historical Tables, Fiscal Year 
1987." Washington, D.C.: U.S. Government Printing 
Office, 1986. (2) U.S. Council of Economic Advisors. 
"Economic Report of the President." Washington, 
D.C.: U.S. Government Printing Office, 1986. (1) 
Farber, Kit D. and Gary L. Rutledge. "Pollution 
Abatement and Control Expenditures." "Survey of 
Current Business" 66 (1986: 100-103. (2) U.S. Coun- 
cil of Economic Advisors 1986. 







28320 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



the next Administration should not be de- 
ceived into believing that environmental 
protection can be achieved without incur- 
ring significant costs. The American public 
frequently has affirmed its willingness to 
spend resources necessary to improve the 
quality of the environment and protect 
public health. 

The overall status of the Federal budget, 
however, as well as concern for the interna- 
tional competitiveness of U.S. industry, 
argue strongly for new policies which place 
strong emphasis on economic efficiency in 
environmental protection. Such policies can 
ensure that every dollar spent on environ- 
mental protection 7 achieves the greatest 
amount of protection possible. The recom- 
mendations in this report are designed to do 
just that— to increase environmental protec- 
tion and economic productivity by providing 
incentives for businesses and individuals to 
go beyond what regulators can require. 8 

IDENTIFYING INNOVATIVE SOLUTIONS TO MAJOR 
ENVIRONMENTAL PROBLEMS 

Sixteen major environmental and natural 
resource problems are addressed in this 
report. For each problem, we considered a 
variety of possible policy responses, and as- 
sessed them according to nine major crite- 
ria: 9 

Will the policy effectively achieve our en- 
vironmental goals? 

Will the policy approach be cost-effective, 
that is, will it achieve the environmental 
goals at the least cost (to society at large)? 
This is essential if we are to maximize envi- 
ronmental protection for any given total ex- 
penditure level. 

Will the strategy provide relevant govern- 
ment agencies with the information they 
need? 

How easy (or costly) will monitoring and 
enforcement be? 

Will the policy be flexible in the face of 
change? When changes occur in tastes, tech- 
nology, or resource use, will the policy ac- 
commodate these changes and remain effec- 
tive or will it be in danger of becoming inef- 
fective (or even counter-productive)? 

Will the policy give industry positive, dy- 
namic incentives? For example, will it en- 
courage firms to develop new, environment- 
saving technologies, or encourage firms to 
retain existing, inefficient plants? 

Will the economic effects of the policy be 
equitably distributed? 

Will the purpose and nature of the policy 
be broadly understandable to the general 
public? 

Will the policy be truly feasible, both in 
terms of enactment by the Congress and in 
terms of implementation by the appropriate 
departments or agencies? 

We thus identified what we believe to be 
effective new approaches to the sixteen rec- 
ognized environmental and natural resource 
problems. Although each individual prob- 



7 In 1984, total U.S. expenditures on pollution 
control amounted to about $65 billion— 63% by 
businesses, 21% by all levels of government, and 
16% by consumers. Total pollution control expendi- 
tures were about 1.8% of GNP. See: 

8 A "new environmentalism" which embraces 
such approaches has already emerged. See: Krupp, 
Frederic D. "New Environmentalism Factors in 
Economic Needs." Wall Street Journal, November 
20, 1986, p. 34. 

» This set of criteria is partly based upon a similar 
set of criteria described by: Bohm, Peter and Clif- 
ford S. Russell. "Comparative Analysis of Alterna- 
tive Policy Instruments." "Handbook of Natural 
Resource and Energy Economics, Volume I," eds. 
Allen V. Kneese and James L. Sweeney, pp. 395- 
460. Amsterdam: North-Holland, 1985. 



lem calls for its own distinct policies, certain 
common threads emerge from our recom- 
mendations. Before turning to a summary 
of our specific policy proposals, we describe 
some of these broad themes. 

COMMON THREADS AND IMPLICATIONS FOR 
ENVIRONMENTAL POLICY 

The major common threads of our investi- 
gation can be summarized as follows: (1) 
conventional regulatory approaches were a 
necessary first response to serious environ- 
mental problems: (2) such approaches still 
have important roles to play in many areas; 
and (3) in many other areas, conventional 
regulatory policies need to be supplemented 
by market-based strategies which can foster 
major improvements in environmental qual- 
ity by enlisting the innovative capacity of 
our economy in the development of efficient 
and equitable solutions. More specific 
common threads and implications follow. 
Building on a firm foundation for improved 
environmental protection 
Many environmental problems are interre- 
lated; some of the most effective policies 
will help with several problems simulta- 
neously. For example, the comprehensive 
energy-efficiency program we advocate will 
help fight global warming, acid rain, and 
local air pollution, while strengthening U.S. 
energy security and international competi- 
tiveness. 

Conventional regulatory approaches have 
been effective but need to be supplemented. 
The conventional approaches of setting uni- 
form standards or requiring specific control 
technologies have been effective, but in 
many cases it is becoming more difficult and 
expensive to achieve environmental im- 
provements in this manner. 
Supplementing our regulatory system with 

innovative approaches 
The key to reducing inefficient natural re- 
source use and environmental degradation is 
to ensure that consumers and producers 
face the true costs of their decisions— not 
just their direct costs, but the full, social 
costs of the consequences of their actions. 

Economic-incentive systems provide vari- 
ous ways to do this: tradeable permit sys- 
tems; 10 pollution charges; removal of 
market barriers which promote inefficient 
resource use; and removal of unwarranted 
subsidies of environmentally destructive ac- 
tivities. 

Incentive-Based systems for environmental 
protection 
With incentive-based systems, scarce 
public-sector resources are magnified by the 
tens of thousands of decisions of individual 
firms. Charge systems impose a fee or tax 
on pollution, while tradeable permit systems 
set a total allowable level of pollution and 
authorize firms to conduct market ex- 
changes of permits. 

Tradeable permit systems are generally 
preferable to pollution taxes. They reduce 
uncertainty (present with tax approaches) 
regarding overall pollution reductions, and 
establish a maximum level of aggregate 
emissions. 



'"Some environmental groups have expressed 
concerns regarding emission permit trading and 
similar incentive-based approaches. In Chapters 2 
through 7, we address the major concerns which 
have been expressed. For responses to a broader set 
of criticisms, see: Stewart, Richard B. "Controlling 
Environmental Risks Through Economic Incen- 
tives." Paper presented at Colloquium on New Di- 
rections in Environmental Policy, Columbia Univer- 
sity, New York, October 1, 1987. 



Incentive-based approaches can make the 
environmental debate more understandable 
to the general public. Because they do not 
dictate a particular technology, approaches 
such as tradeable permit systems will tend 
to focus the debate directly on what our en- 
vironmental goals should be, rather than on 
difficult technical questions concerning 
technological alternatives for reaching 
these goals. The establishment of environ- 
mental objectives— of how clean we want 
the environment to be— can become the very 
focus of political debate. 

At a time of concern about our economy's 
international competitiveness, incentive- 
based approaches can provide huge savings 
and increases in productivity. For example, 
a market-based approach to acid rain reduc- 
tion can save us $3 billion per year, com- 
pared with an approach which dictates a 
particular technological solution. 

These policies will not exacerbate budget- 
ary deficits. Incentive-based approaches are 
no more expensive for the government to 
administer than conventional, regulatory 
methods. In fact, funds from tradeable- 
permit auctions could be used to help fi- 
nance an expanded EPA budget. xl 

Economic-incentive approaches allow 
greater levels of protection for any given ag- 
gregate cost of control. Rather than dictat- 
ing to enterprises how they should manu- 
facture their products, incentive-based sys- 
tems impose a cost on pollution-causing ac- 
tivities, leaving it to individual firms to 
decide among themselves how to achieve 
the required level of environmental protec- 
tion. Market forces will drive these decisions 
toward finding the least-cost solutions to en- 
vironmental problems. 

Market-based environmental protection 
measures can provide incentives for firms to 
develop and employ improved pollution-con- 
trol systems. Economic incentives for pollu- 
tion-control technologies and expertise. 
A diversified portfolio of environmental- 
protection strategies 
Reasonable concerns exist regarding the 
design and implementation of economic-in- 
centive programs. The sensible response is 
neither blind retention of the status quo nor 
total abandonment of the present system. 
We propose incremental approaches which 
can build upon our own and other industri- 
alized nations' initiatives with market-based 
policies. 

Market-oriented policies are not a panacea 
for the problems we face. The inappropri- 
ateness of market-oriented approaches for 
some of the problems we investigated sug- 
gests that the optimum set of policies may 
involve a mix of market and more conven- 
tional regulatory processes. 

Using economic-incentive methods to im- 
plement our environmental goals does not 
mean that we need to rely on economic cri- 
teria to select our goals. Adoption of incen- 
tive-based systems to achieve a particular 
aggregate pollution level does not imply 
that the permissible level should be selected 
by using economic criteria. 
Removing market barriers and detrimental 
government subsidies 
Market barriers and government subsidies 
which promote economically inefficient and 
environmentally unsound practices should 



' ' For further discussion of such possibilities, see: 
Ackerman, Bruce A. and Richard B. Stewart. "Re- 
forming Environmental Law: The Democratic Case 
for Market Incentives." Paper presented at Collo- 
quium on New Directions in Environmental Policy, 
Columbia University, New York, October 1, 1987. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28321 



be removed. These actions can simulta- 
neously foster environmental protection; 
promote a stronger, more competitive econ- 
omy; and reduce government budget defi- 
cits. 

Removing unwarranted subsidies does not 
mean that the Federal government should 
abandon to the market place all provision of 
goods and services. In addition to the gov- 
ernment's regulatory role, important owner- 
ship roles remain for the government, such 
as with regard to public lands, wetland ac- 
quisition, and maintenance of the Strategic 
Petroleum Reserve. 

Developing practical environmental policies 
for the 1990s and beyond 

The policies we recommend are practical 
and politically feasible. New policies which 
deliver improved environmental quality at 
reasonable cost and which are consistent 
with American traditions favoring volunta- 
rism and disliking government coercion 
should have a promising future. 

With these themes and common threads 
as background, we turn to a brief summary 
of our specific policy recommendations for 
six categories of major environmental and 
natural resource problems. 

MAJOR RECOMMENDATIONS 

We make 34 individual recommendations 
for the environmental and natural resource 
problems investigated. Detailed descriptions 
of the various problems and our specific rec- 
ommendations for each are provided in 
Chapters 2 through 7 of this report. An out- 
line of our recommendations follows. 
Global air pollution problems 
Problem: The Greenhouse Effect and Cli- 
mate Change. 

Recommendations: Fund research on 
causes and consequences and on adaptation 
and prevention strategies. 

Change current policies to encourage 
energy efficiency because the multiple bene- 
fits (air pollution, trade deficit, energy secu- 
rity) outweigh costs. 

Offset new sources of greenhouse gases 
through trading— new powerplants can af- 
fordably offset COj— not by technology, but 
by working with farmers to plant trees on 
idle farmlands. 

Prevent deforestation through debt-forest 
swaps. 

Set up international trading in green- 
house gases. 
Improve population policies. 
Problem: Stratospheric Ozone Depletion. 
Recommendations: Phase out potential 
ozone depletors (PODs) with tradeable per- 
mits. Auctioning permits for CFC produc- 
tion will enable an orderly phase-down with- 
out windfall profits to producers. 

Provide incentives for recovery of PODs 
from products. 

Support overseas marketing of alternative 
technologies. 
Label POD-containing products. 

Air quality issues 
Problem: Local Air Pollution. 
Recommendations: Implement tradeable 
permits for stationary sources. 

Strengthen mobile-source regulations and 
incentives. 
Problem: Acid Rain. 

Recommendation: Initiate an acid rain re- 
duction credit program. 
Problem: Indoor Radon Pollution. 
Recommendation: Consider several Feder- 
al actions, including tax incentives, subsi- 
dized loans, construction codes, soil tests, 
testing requirements for real estate transac- 
tions, and accelerated information dissemi- 
nation. 



Energy policy and the environment 
Problem: Threats to energy security and 
environmental quality. 

Recommendations: Increase motor vehicle 
fuel-efficiency standards. 

Provide incentives for vehicle efficiency 
and alternative fuels. Tax gas guzzlers and 
use the money for rebates on "gas sip- 
pers"— super efficient cars. 
Expand the strategic petroleum reserve. 
Increase energy efficiency through com- 
prehensive least-cost bidding at electrical 
utilities. Allow conservation to break into 
the power market— saving energy can make 
power available just as surely— and often 
more cheaply— as building a new power- 
plant. 

Fund research on passively safe nuclear 
power. 

Federal water policy 
Problem: Inefficient use and allocation of 
water supplies. 

Recommendation: Remove barriers to 
water markets. 

Problem: Degradation of surface and 
ground water quality. 

Recommendations: Implement a combina- 
tion of regulatory and market programs for 
nonpoint sources. 

Focus the Conservation Reserve Program 
on water quality problems. 

Provide incentives for adoption of inte- 
grated pest management. 

Implement tradeable discharge permit 
systems for point sources of water pollut- 
ants—set a total limit, and then let industry 
decide how to meet it. They will follow 
market principles to find a least-cost solu- 
tion. They will control the sources where 
you get the biggest pollution reduction for 
the money. 

Public land management and other land use 
issues 
Problem: Management of the Public 
Lands. 

Recommendations: Implement a public 
stewardship mandate— so that the total eco- 
nomic picture (including the importance of 
recreation) is recognized, rather than just 
cash receipts or agency budgets. 

Reduce government subsidies to environ- 
mentally destructive, single-use policies like 
the rape of the Tongass NF. 

Invest government revenue from non-re- 
newable resources in recreational and envi- 
ronmental assets. 

Problem: Depletion of American wetland 
resources. 

Recommendations: Institute market in- 
centives to reflect wetland values. 

Improve use of environmental impact 
statements. 

Restructure the Federal aid in fish resto- 
ration fund. 

Develop a sport fishing conservation 
stamp. 

Solid and hazardous waste management 
Problem: Solid Waste Management. 
Recommendation: Implement policies 
which allow recycling to compete. 

Problem: Presence of Toxic Substances in 
the Environment. 

Recommendation: Provide incentives for 
source reduction. 

Problem: Management of Toxic and Infec- 
tious Waste. 

Recommendation: Implement a deposit- 
refund system for containerized wastes. 

PROGNOSIS FOR A NEW ERA OF ENVIRONMENTAL 
PROTECTION 

There continues to be a broad national 
consensus in favor of effective environmen- 



tal protection and improvement. In many 
cases, our environmental goals are clear — 
the question is how to get there. A theme of 
this study is that the policy tools chosen do 
make a difference. Although conventional 
regulatory policies have frequently been ef- 
fective, they have also had the unfortunate 
effect of heightening antagonism between 
economic and environmental goals. But 
these goals should and must be complemen- 
tary in the long run if either is to be 
achieved. Economic- incentive approaches to 
environmental protection cultivate this 
complementarity. 

Private-sector innovation, which is encour- 
aged by market-oriented environmental 
policies, is essential if the U.S. is to main- 
tain both economic growth and environmen- 
tal quality. Fairness to future generations 
dictates that we begin to deal with our long- 
term problems, both economic and environ- 
mental. Sustainable solutions to today's 
problems are required, because the debts 
which are incurred today— whether econom- 
ic or environmental— will some day have to 
be paid. 

If Theodore Roosevelt's conservation 
ethic at the beginning of this century repre- 
sented the first important era of environ- 
mental concern in the United States, then 
the decade of important new laws and regu- 
lations following Earth Day was the second 
era. The challenge we face today is to move 
aggressively toward a third era— a period 
when practical and economically sensible 
policies will provide more effective and effi- 
cient management of natural resources and 
protection of the environment. 

The PRESIDING OFFICER. The 
senior Senator from Pennsylvania. 

Mr. SPECTER. Mr. President, I 
thank the Chair. 

(The remarks of Mr. Specter per- 
taining to the introduction of legisla- 
tion are printed in today's Record 
under Statements on Introducing Bills 
and Joint Resolutions.) 



RECESS UNTIL 2 P.M. 

The PRESIDING OFFICER. The 
Senate stands in recess until 2 p.m. 

Thereupon, the Senate at 12:33 p.m., 
recessed until 2:01 p.m.; whereupon, 
the Senate reassembled when called to 
order by the Presiding Officer [Mr. 
Adams]. 

The PRESIDING OFFICER. In my 
capacity as a Senator from Washing- 
ton, I note the absence of a quorum. 
The clerk will call the roll. 

The assistant legislative clerk pro- 
ceeded to call the roll. 

Mr. STAFFORD. Mr. President, I 
ask unanimous consent that further 
proceedings under the call of the 
quorum be dispensed with. 

The PRESIDING OFFICER (Mr. 
Daschle). Without objection, it is so 
ordered. 

Mr. STAFFORD. Mr. President, I 
ask unanimous consent to speak as if 
in morning business. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 












28322 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



ATMOSPHERIC 
CONTAMINATION— XVII 



Mr. STAFFORD. Mr. President, the 
bad news is that our planet's air is 
dirty and it is going to get dirtier 
unless we take strong measures to re- 
verse that trend. The good news is 
that those strong measures are readily 
available to us and we can clean up 
our act if we really want to. 

That is the essence of the daily re- 
marks I have delivered during each of 
the last 16 days with the forbearance 
of the Senate. I have discussed in some 
detail the threat to humanity posed by 
atmospheric contamination and some 
practical ways of responding to that 
threat. 

In this concluding report on atmos- 
pheric contamination, I would like to 
review and summarize the problems 
and appropriate solutions. 

AIR SUSTAINS OUR LIVES 

Air is not naturally occurring on our 
planet. The atmosphere is produced 
by living things— animals produce the 
carbon dioxide and plants produce the 
oxygen. 

Once the atmosphere has been cre- 
ated, it traps heat and, thus, enables 
life to continue and to change. The at- 
mosphere also provides living things 
with protection from the radiation of 
the Sun. That radiation is strong 
enough to kill us, except for the 
screening provided by the atmosphere. 

The air is also the source of nutri- 
tion. Just as we eat food to stay alive, 
so must we breathe air to survive. 

That's why we must protect the food 
we eat and the air we breathe from 
contamination. 

But, our air has been poisoned by 
pollution. That pollution has reached 
the point where humans, animals, 
fish, and plants have become ill— and 
even have died. 

Pollution has also upset the atmos- 
pheric mix that allows just the right 
amount of life-sustaining heat from 
the Sun to enter and to leave our envi- 
ronment. As a result, the Earth is get- 
ting warmer— and that global warming 
threatens to create major changes in 
life on this planet. 

Our carelessness in releasing man- 
made chemicals into the atmosphere 
has caused a thinning of the ozone 
layer— the shield that protects us from 
the Sun's deadly radiation. At the Ant- 
arctic, that thinning has become a 
hole each winter. 

And, of course, we are all familiar 
with the various forms of air pollution 
closer to the ground— the pollution 
from tailpipes and smokestacks that 
irritates our eyes and our lungs and 
that threatens our health most direct- 
ly. 

THE NATURE OF THE THREAT 

The technological development and 
economic activity that have brought 
us an enhanced standard of living 



have also changed the nature of the 
pollutants that now threaten our lives. 

Our accelerating uses of fossil fuels 
and of manmade chemicals have 
placed all inhabitants of Earth at risk. 

Chlorofluorocarbons— Freons, as 
they are known commercially— are the 
known cause of depletion of the ozone 
layer. 

Carbon dioxide plays a key role in 
global warming. 

Sulphur dioxide threatens human 
health and also is a major cause of 
acid rain. 

Oxides of nitrogen and ground-level 
ozone threaten both human health 
and our environment. 

Other pollutants— such as methane 
and carbon monoxide— play catalytic 
roles with other air pollutants. 

Some of the consequences of these 
pollutants include global climate 
change; ground-level smog that threat- 
ens humans and trees; acid rain that 
kills trees, and the combination of all 
these that combine to make a deadly 
atmospheric soup. 

CHLOROFLUOROCARBONS AND THE OZONE LAYER 

Production of chlorofluorocarbons 
[CFC's] was minimal until 1931, but 
by 1984 nearly 1.5 billion pounds of 
CFC 11 and CFC 12— just two mem- 
bers of the Freon family— were being 
produced. 

Because this family of chemicals has 
a lifetime of between 100 and 150 
years, each and every molecule of 
CFC's ever produced by man is still in 
existence today and will be around for 
another century or so— destroying 
ozone molecules day after day. 

When the CFC's are released into 
the atmosphere— as they are day after 
day— they destroy ozone molecules in 
the stratosphere. It is the ozone layer 
that protects this planet from the 
deadly radiation of the Sun. 

That layer is being weakened every- 
where by CFC's. In addition, over the 
Antarctic a hole as big as North Amer- 
ica occurs in the ozone layer every 
winter. 

The message is surely clear— the re- 
lease of CFC's into the air is a threat 
to life on Earth. We must stop using 
CFC's as a blowing agent for cushions 
and building material; as refrigerants, 
and as a solvent in the computer chip 
industry. 

Even the U.S. Environmental Protec- 
tion Agency has reached that conclu- 
sion, although somewhat belatedly. 

FOSSIL FUEL COMBUSTION 

This may be a good place to remind 
ourselves that we Americans each year 
dump an average of 37,000 pounds of 
air pollution into the atmosphere for 
each man, woman, and child in our 
country. 

Our use of fossil fuels to power our 
development in this world has resulted 
in sixfold increases in annual sulphur 
dioxide emissions since 1900. Nitrogen 
oxide emissions have increased tenfold 
in the same period. These gases, along 



with hydrocarbons, are the major 
sources of both urban air pollution 
and acid rain. 

There is more. A large tank of gaso- 
line produces about 400 pounds of 
carbon dioxide when that fuel is con- 
sumed. The average electric power- 
plant sends 2 pounds of coal up its 
smokestack for every pound it con- 
verts into electricity. 

Most of the pollutants we pump into 
the atmosphere do not exist in nature 
and, when some do, they do so in 
vastly smaller quantities than man 
produces. So, it is easy for us to over- 
look the enormous aggregate total— 
and the extreme potency— of many of 
these pollutants. 

For instance, the EPA has estab- 
lished 120 parts per billion of ozone as 
a level that is safe. In an earlier dis- 
cussion, that level was inadvertently 
set at 12 parts per billion. But, at 120 
parts per billion, ozone begins to 
change cell walls of the human lung 
within seconds. And, the level of ozone 
and other ingredients of the soup of 
pollution we breathe is thicker and 
more unhealthy than ever before. 

Clearly, the time has come for us to 
uncouple the direct relationship of ad- 
vances in our standard of living and in- 
creases in air pollution. 

THE GREENHOUSE EFFECT 

The impact of the Sun's light on the 
soil and water of Earth is enough to 
generate heat. Much of this heat is re- 
flected back toward space as infrared 
radiation, but some of it is retained, 
including the heat that is trapped by 
the gases that form our atmosphere. 

This is called the greenhouse effect, 
because it works the same way as glass 
panels in a hothouse trap solar heat 
before it has a chance to escape. 

A variety of circumstances combine 
to deterine the climate and the heat of 
this planet, but scientists today are 
convinced global temperature is at or 
near its high point in a million years. 
And, that temperature may be going 
up— all because of air pollution. 

The pollutants we are releasing into 
the air are trapping more and more 
heat in the Earth's atmosphere. These 
pollutants are carbon dioxide, CFC's, 
nitrous oxide, methane, and ground- 
level ozone— or smog. 

We are surrounded by the signs. The 
years 1980, 1981, 1983, and 1987 are 
the hottest 4 years in recorded histo- 
ry—and 1988 promises to be hotter 
still. 

Forest fires in our West are the 
worst in history. Glaciers have retreat- 
ed in Alaska. Warm water is believed 
to be the cause of coral kill in the Car- 
ibbean. Red spruce are growing faster 
without explanation. 

Carbon dioxide is the air pollutant 
that traps most of the heat and con- 
centrations of carbon dioxide have 
been rising steadily. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28323 



The CFC family is another major 
greehouse gas, and accounts for about 
20 percent of the global warming. 

Another major pollutant with green- 
house impact is ground-level ozone, 
which we most often call smog. It is 
formed when hydrocarbons, like un- 
burned gasoline, and oxides of nitro- 
gen react in the presence of sunlight. 
With the high temperatures of this 
decade have come the highest smog 
levels in the country since the 1970's. 

The consequences of continued 
global warming should be cause for 
global alarm. Unless action is taken to 
halt the rising tide of these pollutants, 
scientists warn that this planet's tem- 
perature will continue to rise to the 
point where it will be the same as if 
the Earth had moved 1 million miles 
closer to the Sun. 

These same scientists tell us that 
could result in the following circum- 
stances: 

The Earth's temperature will in- 
crease; the stratosphere will cool; the 
number of monsoons and hurricanes 
will multiply; sea ice will melt; oceans 
will expand and their levels will rise; 
the ice cap will shrink; dustbowls will 
overtake the world's breadbaskets, and 
our lives will be very, very different. 

ACID RAIN AND SMOG 

There is no longer any question that 
atmospheric contamination has killed 
forests in North America from North 
Carolina to Vermont, as well as in 
Europe. 

We can argue whether the killer pol- 
lution has been acid rain or ozone, or a 
combination of the two with other pol- 
lutants. But, it is clear that what we 
have called acid deposition is causing 
massive damage throughout North 
America and Europe. 

And, that acid rain caused by oxides 
of nitrogen and sulphur dioxide dam- 
ages more than forests. Acidic rain 
damages lakes and streams and the 
plant and fish life of those waters. 

The soup of air pollutants that is be- 
coming all too common in this country 
also damages the health of not only 
the very young and the very old and 
those with respiratory diseases, but 
also of those who are healthy and 
strong. 

More than 100 million Americans 
are breathing air that does not meet 
Federal health standards. And, 35 mil- 
lion of those Americans live in dirty 
air regions where the air quality has 
actually gotten less healthy since 1981. 

It is not just those who live in our 
big cities who are at risk. Scientists 
tell us that ozone levels in rural areas 
of Europe and even in the middle of 
the Pacific Ocean have doubled and 
tripled in the last century. 

TAILPIPES AND SMOKESTACKS 

Motor vehicles generate more air 
pollution than any other single human 
activity. Electric utilities hold down 
second place. 



Cars and trucks are the major 
sources of carbon monoxide, oxides of 
nitrogen and hydrocarbons. They are 
a significant source of carbon dioxide 
and, particularly in this country, of 
CFC's. All of these pollutants cause or 
contribute to the formation of smog. 
And, some of them are enemies of the 
stratospheric ozone layer. 

There were less than 50 million cars 
on this planet in 1950, and 85 percent 
of them were in North America. The 
auto population is now about 350 mil- 
lion, with 125 million of those outside 
North America. It is expected there 
will be more than 500 million motor 
vehicles on Earth by the year 2000. 

Behind motor vehicles in the pro- 
duction of air pollution come electric 
powerplants. One third of all oxides of 
nitrogen released into the air of this 
Nation comes from powerplants. The 
figure is about the same for carbon di- 
oxide emissions. 

More than two-thirds of the coal, oil, 
and gasoline used to fuel our power- 
plants and motor vehicles is wasted be- 
cause of the inefficiency of our tech- 
nology—and that means more pollu- 
tion than necessary. 

TOWARD A BETTER, HEALTHIER FUTURE 

An examination of the causes of at- 
mospheric contamination provides us 
with the solutions to the problem— 
and also suggests that those solutions 
are not too difficult to achieve. But, 
first, we will have to overcome the fear 
of change. 

That should not be too hard to do, 
since we must know by now that 
change is not only necessary, but it is 
inevitable. Clearly, we will have to 
change if we are to survive. 

To continue business as usual is to 
gamble with the very future of our 
planet. 

Let us first consider the depletion of 
the ozone layer and the role of CFC's 
in that happening. 

It is clear that the time has arrived 
for a worldwide ban on the production 
and use of CFC's, or Freons as they 
are known to most people. If we can 
not accomplish a total ban, we had 
better get as close to it as possible, 
with exemptions for only necessary 
functions where there are no substi- 
tutes. 

CFC's are considered to be essential 
in refrigeration, but in the United 
States only 5 percent of Freon produc- 
tion is devoted to refrigeration. 

Most CFC's are used to blow foams- 
rigid foams such as those used in Styr- 
ofoam cups and insulation, or soft 
foams such as those used in couch 
cushions. Substitutes are available for 
virtually all these uses, but they will 
not be developed and put on the 
market until CFC's are banned. 

Much the same condition exists for 
the use of CFC's in air conditioners 
and as cleaning agents in the electron- 
ics industry. In addition, the world 
must act to eliminate the releases of 



CFC's into the atmosphere. CFC's or 
Freons should be disposed of only 
through incineration or recycling. 

But those are all attainable goals 
and will protect life on this planet 
from increased radiation from the sun 
that results from depletion of our 
stratospheric ozone layer that shields 
us from the sun's radiation. 

If we must ban CFC's to protect our 
ozone shield, then it is clear that we 
must seek to immediately reduce— and 
eventually eliminate— air pollution if 
we are to solve our acid rain problem. 

About 75 percent of the carbon diox- 
ide emitted in the United States comes 
from electric powerplants, motor vehi- 
cles, and homes burning fossil fuels. 
These same sources are also responsi- 
ble for most of the other air pollut- 
ants—sulphur dioxide, oxides of nitro- 
gen, and carbon monoxide. 

Vast amounts of each of these pol- 
lutants could be eliminated by simply 
increasing the efficiency of the pollut- 
ing sources. And, the technology is at 
hand for achieving that goal. 

New powerplants in this country 
achieve 38 percent efficiency. Old pow- 
erplants operate at 28 percent efficien- 
cy. The Japanese claim they achieve 
43 percent efficiency with their new 
powerplants. Thus, by simply replac- 
ing old units with the best available 
current technology, air pollution could 
be reduced by as much as 50 percent 
from these sources. 

Greater gains are available from 
automobiles. Volvo has a sedan that 
gets 60 miles on a gallon of gasoline. 
Toyota has a car that gets close to 100 
miles on a gallon of gasoline. 

Similar efficiencies are available in 
home furnaces, air conditioners, and 
hot water heaters. 

As matters stand at present, we 
waste between 50 and 75 percent of 
the fossil fuel we burn in this coun- 
try's automobiles, furnaces, and 
homes. That waste adds to our air pol- 
lution and it is not necessary. It dam- 
ages our health and our environment 
and it costs us money and resources. 

Science tells us that even greater ef- 
ficiencies are available in the future, 
efficiencies that can save us money 
and end our deadly habit of poisoning 
ourselves, our environment, and our 
future. 

So, there is no lack of solutions, only 
a lack of resolve. 

However, as the danger we face from 
atmospheric contamination grows 
clearer each day— as it did this 
summer, for instance— I am confident 
we will take the steps that are already 
available to us to rescue ourselves 
from the hazards of our own creation. 

We can do no less if we are to meet 
our responsibility to future genera- 
tions and to the survival of our planet. 

Mr. President, I yield the floor, and I 
suggest the absence of a quorum. 







28324 

The PRESIDING OFFICER (Mr. 
Adams). The clerk will call the roll. 

The assistant legislative clerk pro- 
ceeded to call the roll. 

Mr. STAFFORD. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



Mr. DOLE. That is fine. 



SENATOR ROBERT C. BYRD 
Mr. STAFFORD. Mr. President, I 
take the floor only to say how much I 
enjoyed the noon presentation to the 
majority leader and, in the 18 years I 
have been privileged to serve here, 
how much I have enjoyed the relation- 
ship with the majority leader and ad- 
mired his leadership in this body. 

Mr. BYRD. Mr. President, I am 
deeply touched by the Senator's re- 
marks, not by the length of them, be- 
cause they were brief, but by the 
depth of sincerity and feeling that I 
see there. I thank my friend. He can 
be sure that the image of a good man 
will never fade from my memory. 



ORDER OF PROCEDURE 
Mr. BYRD. Mr. President, I have 
discussed with the distinguished Re- 
publican leader our taking up S. 430, 
the retail price maintenance bill. 
Under the order that was entered 
some time ago, the majority leader is 
authorized to take up that bill after 
consulting with the distinguished Re- 
publican leader. We discussed the 
matter at lunch and the Republican 
leader is here on the floor now. 

So, unless the distinguished Republi- 
can leader has a preference that we 
not go to that just now, I will not exer- 
cise that order at the moment. 

The Republican leader has indicat- 
ed—I will yield to the Republican 

Mr. DOLE. Mr. President, the order 
previously entered authorizes the ma- 
jority leader to move to go to that. He 
has consent to do that. We have no 
problem with that, except a temporary 
one. 

Senator Thurmond, who will be han- 
dling the bill on this side, is involved 
now in a markup in the Judiciary 
Committee pertaining to judges and, I 
believe, 10 or 12 other pieces of legisla- 
tion. That started at 2. I am not cer- 
tain how long it will run. But, follow- 
ing that, we would certainly be in a po- 
sition to do that. 

Mr. BYRD. Very well. I believe the 
leader has stated certainly sufficient 
and good reasons and I will not go to 
that measure at the moment. Or we 
could go to it and simply have morn- 
ing business and let Senators talk on 
other things in the meantime so there 
will be no action on it until Mr. Thur- 
mond is able to come to the floor. I will 
do whichever the Republican leader 
wishes. 



RETAIL COMPETITION 
ENFORCEMENT ACT 

Mr. BYRD. Mr. President, I ask that 
S. 430 be laid before the Senate, with 
the understanding that there will be 
no action on it until Mr. Thurmond 
can be on the floor. In the meantime, I 
will then ask unanimous consent that 
there be morning business and that 
Senators may be permitted during the 
morning business to speak for not to 
exceed 5 minutes each until such time 
as perhaps we can get some other 
matter up for the afternoon. 

Any rollcall votes that are ordered, 
Mr. President, will be laid over until 
tomorrow morning. There are several 
Senators on both sides of the aisle 
who have to go elsewhere during the 
afternoon. It is for that reason that 
rollcall votes will be stacked for tomor- 
row if they are ordered today. So, I do 
hope the Senate can get some work 
done and the distinguished leader and 
I join in that hope. 

There are several bills— I would not 
call them minor bills, but bills of a 
minor nature and important bills. 
They are important and we hope to 
get them done before we go out sine 
die. 

So, this would be a good time, I be- 
lieve, if we could find ways to have 
those bills taken up and disposed of 
either by voice vote or rollcall votes, if 
ordered, carried over. 

So I ask that S. 430 be laid before 
the Senate under those conditions. 

The PRESIDING OFFICER. The 
clerk will report. 

The assistant legislative clerk read 
as follows: 

A bill (S. 430) to amend the Sherman Act 
regarding retail competition. 



MORNING BUSINESS 
Under the previous order, the 
Senate proceeded to conduct morning 
business. 



THE DRUG BILL 

Mr. WILSON. Mr. President, I am 
taking the floor to voice a plea, and 
that is that Senators who have an in- 
terest in the drug bill on both sides 
communicate to the managers of that 
legislation. The state of play, as I un- 
derstand it, is that the two negotiators 
representing the Democratic and Re- 
publican sides of the aisle, Mr. Nunn 
and Mr. Rudman respectively, are 
ready, willing, and able to set, if it is 
possible, a list of amendments which, 
if agreed upon by the body, would 
permit us to go forward to the drug 
legislation. 

Mr. President, I can only say that I 
hope that that will happen without 
delay because I greatly doubt that my 
constituents are different from those 



of my colleagues on this floor. If that 
be true, I will say that, in the judg- 
ment of my constituents, the most 
pressing business that remains for the 
100th Congress is to complete action 
on a drug bill. We have, through dint 
of, I think, very good and earnest ef- 
forts made on both sides, come to a 
consensus on a core package. 

There were certain amendments, 
certain subjects, certain proposals 
which could not be agreed upon. It 
was agreed that, instead, once we had 
come to a consensus on that core bill, 
on both sides we would agreed that a 
certain number of these proposals, 
more or less controversial proposals, 
would be offered as amendments. And 
the hope expressed by the negotiators 
was that we might come to some con- 
sensus that would limit the number of 
amendments on each side. 

With all due respect to the propo- 
nents of other pieces of legislation 
that remain before us, however impor- 
tant they may seem to the individual 
sponsors, however meritorious they 
may be, I would have to say that in 
the view of our constituents— and I 
think that they are quite correct— far 
more important than anything else 
that remains upon our legislative 
agenda is action upon the drug bill. I 
really think that it is difficult for us to 
go home and explain with anything 
like convincing arguments why it is 
that we have not acted upon what 
they regard as the most urgent priori- 
ty. 

So I would simply say, Mr. Presi- 
dent, that it is not a time for finger- 
pointing for recrimination; it is, in- 
stead, a time for action. If there are 
things that need to be resolved, then I 
would suggest and I would implore my 
colleagues to come with Mr. Nunn, 
come with Mr. Rudman, let us resolve 
them, let us go forward. 

To my knowledge, on our side, we 
are ready to go. We are certainly ready 
to meet with Mr. Nunn. I know that 
the offer has been made by Mr. 
Rudman. And I will state that I think 
that we need, not just for our own 
credibility, but really to respond, as we 
should, to the wishes and to the clear 
needs of our constituents, we need to 
move on this legislation. 

We are late already in attacking it. 
It is of the most basic importance for 
reasons well known to all of us. This is 
a contagion that is spreading through- 
out the land and afflicting more and 
more of our young people, endanger- 
ing more and more of our peace offi- 
cers. It is the kind of thing that we 
really cannot afford further delay 
upon. 

So, again, I will simply say that I 
think that there should be no further 
delay, that there is the necessity for 
action. It is an urgent necessity. I 
doubt that anyone on the floor would 
disagree with that statement. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28325 



That being true, let us move upon 
our conviction and move upon this leg- 
islation without delay. 

The PRESIDING OFFICER. Who 
seeks recognition? The Senator from 
New York. 



ANNOUNCEMENT OF POSITION 

ON A VOTE— THE BERNE 

TREATY 

Mr. D'AMATO. Mr. President, 
today, at about 11:50 a.m., the Senate 
passed S. 1301, the bill to implement 
the Berne Treaty. This Senator was 
not here to vote. Had I been here I 
would have voted for the bill. 

I was absent by necessity, since I at- 
tended the U.S. Holocaust Memorial 
Museum dedication ceremony for the 
cornerstone, at which President 
Reagan was eloquent in his remarks 
on behalf of the people of this Nation. 
In addressing that terrible holocaust 
he spoke of the necessity that there be 
a living memorial, which this museum 
will be, so as to memorialize those who 
were so tragically brutalized. It will 
serve as a reminder and an institution 
of instruction to future generations to 
be mindful of all of those kinds of ac- 
tivity that brought this world to that 
tragic part in our history. 

So, Mr. President, unavoidably, 
while the rollcall was being conducted, 
we were in the midst of ceremonies 
and they thereafter continued, which 
precluded my attendance at a lunch- 
eon in well-deserved tribute to the ma- 
jority leader, Mr. Byrd. 



THE DRUG BILL 

Mr. D'AMATO. Mr. President, I 
would like to address something that I 
believe is absolutely unconscionable, 
and that is the manner in which we 
are conducting our business here in 
the Congress of the United States and 
in the Senate in particular. We have 
now been here for the past week, 
Monday, Tuesday, Wednesday, and we 
have done little if anything— nothing. 

We talk about the necessity of a 
drug bill. We have the core drug bill, 
S. 2852. We have agreed upon it. We 
have heard one person after another. I 
have extolled the virtues, to the ma- 
jority leader and minority leader, of 
getting together a bipartisan group, a 
task force, to work out the problems 
wherever they could, to finalize the 
bill, to bring it to the floor. But we are 
not acting on it, Mr. President. This is 
silly and it is wrong and it is politics at 
its worst form. 

What do we do here? We are waiting 
to bring up those bills, as contentious 
as they may be, which will seek to 
maybe embarrass or put one party in a 
better position with the public. We are 
playing national propaganda games 
here while we promise the people back 
home that, yes, we are committed. We 
are going to pass a bill that is going to 



help. We are going to provide educa- 
tion money and rehabilitation money 
and law enforcement money to deal 
with the drug problem. And we are 
doing none of that. 

And the shame of it is while this 
Chamber is empty, while we are con- 
ducting no business whatsoever, we 
should be doing the business of the 
people and that is acting on this bill, 
putting forth the serious amendments 
that those Members may think are 
necessary, voting on those amend- 
ments, going over this bill, striking 
those areas which we may not agree 
on. 

But for us to be frittering away this 
precious time in an act which is just 
fraught with politics? That is all we 
are doing now and we are going to 
come back next week and by God I 
know what is going to take place. 
Come next Thursday, next Friday, 
maybe next Saturday, when everybody 
wants to get out of here, they will say 
we are too busy to be debating impor- 
tant issues. 

Money laundering, how do we stop 
the billions of dollars going through 
the financial institutions of this coun- 
try? Oh, we cannot talk about that. 

How do we see to it that honest 
people, when they turn in suspected 
drug dealers, as it relates to those who 
come in and make large cash pay- 
ments for their Porsches and other 
fancy cars, that information can be 
used effectively? Because many of 
those people who are doing this are 
using illegal funds that come from 
drug proceeds. How do we see to it 
that we make a law that begins to deal 
with this? Certainly not by the kind of 
games and charades we see here now. 
If we want to try to influence the 
election, that is one thing. And this is 
one Senator who says what we are 
doing right now is nothing more than 
a political charade. The business of 
the people, acting on a drug bill, we 
are not doing. The business of at- 
tempting to cast one party or the 
other as uncaring, not having a social 
conscience, that is what we are doing. 
It is nothing but political pap. 

I do not take to this floor that often, 
and certainly as it relates to making 
these kinds of what I feel are serious 
charges. I do not think I have done it 
before. But I do it now. This is the 
first time in my 8 years as a Senator 
that I have seen us embark upon this 
deadly dance of politics, while the 
deadly scourge of drug abuse needs 
action. And I predict again, and I serve 
notice to those of my colleagues who 
say: "Oh, Alfonse, this is too conten- 
tious to debate," when we come 
around to next week. I am not going to 
be bound by some time-sensitive agree- 
ment to get out, that I should be pre- 
cluded from following through on this 
important legislation, given the fact 
that for this entire week, and probably 
for the balance of the week, we have 



done little, if anything, while we could 
have been debating this bill, while we 
could be addressing the merits of it, 
while we could be improving it, having 
our debates, as contentious as they 
may be. We are going to save that to 
the last minute, using the clock of ad- 
journment as the excuse to curtail le- 
gitimate, honest debate. 

This Senate is not doing the busi- 
ness of the people, and its conduct is 
disgraceful. 

The PRESIDING OFFICER. The 
Senator from Louisiana. 



AMENDMENTS TO THE CLEAN 
AIR ACT 

Mr. BREAUX. Mr. President, I lis- 
tened with great interest yesterday to 
the eloquent comments of the Senator 
from Maine [Mr. Mitchell], with 
regard to the disappointing prospects 
for enactment of legislation to revise 
and strengthen the Clean Air Act this 
year. I share his view that it is indeed 
unfortunate that no further action 
will be possible during this Congress, 
and commend him for his efforts and 
diligence in working to bring a bill to 
the Senate floor. Senator Mitchell 
has been and will continue to be a 
strong and effective advocate for 
strengthening the Clean Air Act. He 
has my admiration for his tenacity in 
the face of strong opposition from 
extrme elements on both sides of this 
issue. 

The political leadership of this coun- 
try has a responsibility to provide our 
citizens with a healthful environment, 
and the need to significantly improve 
the quality of our air is an important 
component of that responsibility. 
Ozone and carbon monoxide threaten 
the health of Americans, particularly 
in urban areas throughout our entire 
Nation. Other air pollutants which 
may be hazardous or toxic are inad- 
equately controlled. Acid rain contin- 
ues to damage lakes and streams. The 
time for action is now, and I for one 
had hoped that the 100th Congress 
would tackle these difficult issues in a 
realistic manner. 

At this point, I would like to offer a 
few thoughts on how we might break 
the impasse in which we find ourselves 
on air quality issues, if we are to be 
successful in moving forward with leg- 
islation that will genuinely improve 
the quality of the air we breathe, that 
will tackle the problem of emissions of 
toxic air pollutants, and that will ag- 
gressively address the problem of acid 
rain, we must find a different and real- 
istic way of confronting the issues. We 
must reject the simplistic notion that 
to be concerned about the costs of reg- 
ulatory programs is to somehow be un- 
concerned about the health and well- 
being of our citizens and of our envi- 
ronment. And we must reject the false 
logic that failure to act is cost-free. As 










28326 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



so clearly expressed yesterday by my 
good friend, the Senator from Maine: 

A policy that imposes huge job losses in 
West Virginia or Ohio or Kentucky is no 
more acceptable than a policy that imposes 
heavy pollution damage on Maine or Ver- 
mont or North Carolina. 

We must confront this problem together. 
We must work together to solve it. 

Mr. President, the public interest is 
ill-served by failure to act to resolve 
our air quality problems. We fail as an 
institution if we allow uncompromis- 
ing demagogues on either extreme to 
prevent the reasonable and realistic 
solutions that will benefit the Ameri- 
can public. 

As a Senator representing the State 
of Louisiana, I am committed to pro- 
ducing a sound legislative approach to 
our air quality problems that recog- 
nizes reality. It is a reality that our 
citizens and our society suffer from 
our failure to strengthen the Clean 
Air Act. It is a reality that we must be 
concerned with the economic impacts 
of regulatory proposals, and search for 
ways to maximize the benefits of our 
actions while minimizing the costs. It 
is a reality that we must search for 
compromise among differing view- 
points. It is a reality that we are 
doomed to failure again and again if 
we construct proposals that galvanize 
and focus opposition rather than 
searching for innovative ways to re- 
solve differences. Success in producing 
such a bill will demand a willingness 
and strength on the part of Senators 
to stand against those on either side 
who would have us do nothing rather 
than work together for the benefit of 
our citizens. 

Mr. President, I intend to work with 
my colleagues during the months lead- 
ing up to the 101st Congress to devel- 
op such a legislative proposal. I am 
committed to enactment of legislation 
to strengthen the Clean Air Act, and 
pledge my cooperation to the Senator 
from Maine and other of my col- 
leagues who are prepared to end the 
impasse over air quality and work to 
produce amendments to the Clean Air 
Act that can become law. 



THE DISTRICT OF COLUMBIA'S 
DECISION TO CLOSE ITS PRIS- 
ONS TO NEWLY SENTENCED 
INMATES 

Mr. TRIBLE. Mr. President, earlier 
today the residents of the Washington 
metropolitan area were given a rude 
awakening. Citizens of northern Vir- 
ginia, Maryland and the District of Co- 
lubmia awoke to a Washington Post 
headline that read: "City Closes Its 
Prisons to New Inmates". Simply put, 
the Mayor has decided not to let any 
more inmates into city jails. 

Once more, Mr. President, the Dis- 
trict of Columbia has proven incapable 
of managing a prison system. And 
once more, the city's incompetence 
has imperiled the public safety. 



To prevent that, Mr. President, I 
have today contacted the Attorney 
General to urge that he temporarily 
begin accepting newly sentenced Dis- 
trict inmates into the Federal prison 
system. I do so reluctantly because the 
Federal Government is not to blame 
for this crisis. But I believe the city 
has left us little choice. 

Last night's decision was the latest 
in a series of mistakes that make the 
keystone cops look like the height of 
efficiency. My colleagues have no 
doubt read or heard about the wave of 
escapes from Lor ton Prison— 10 so far 
this year. The city has done nothing 
to correct that problem. 

The city's Lorton Prison is also the 
site of a rampant drug problem. More 
than 80 visitors to Lorton this year 
have been found to be in possession of 
illegal drugs, and law enforcement of- 
ficials estimate that guards are inter- 
cepting less than one-third of the 
drugs flowing into Lorton. The city 
has done nothing to correct that prob- 
lem. 

But the city's inaction is most appar- 
ent in its unwillingness to seriously ad- 
dress the prison crowding crisis. For 
years, the city has been told by this 
Senator and by others that it must 
expand its prison capacity, and that it 
should look within the city for sites on 
which to do so. For years, the city has 
done nothing. 

Its only response has been to blame 
others for a crisis of its own making. It 
has blamed the courts for forcing the 
city to comply with inmate ceilings at 
several of its prisons. It has blamed 
the Attorney General for not taking 
enough prisoners into the Federal 
system, even though Federal prisons 
now hold more than 2,000 city in- 
mates. And the Mayor himself has had 
the nerve to blame President Reagan, 
saying that the flow of drugs into the 
United States is the reason the Dis- 
trict of Columbia does not have 
enough prison space. 

Enough is enough, Mr. President. 
The city has failed and failed miser- 
ably. It has proved that it is better at 
laying blame than at managing pris- 
ons. And we must help to devise a 
long-term solution to the mess that is 
the D.C. Corrections Department. 

Unfortunately, the city has also cre- 
ated a short-term crisis. It has refused 
to accept newly sentenced inmates, 
and there is a danger that they may 
go free. There is a danger that they 
will escape easily from where they are 
being held; last night, for example, 23 
newly sentenced inmates were housed 
in the basement of the courthouse 
downtown. These are dangers we 
cannot accept. 

For that reason, I have contacted 
the U.S. Attorney General today to 
urge that he consider accepting newly 
sentenced city inmates into the Feder- 
al prison system. Let me make clear 
that I do so reluctantly, for this crisis 



was not caused by the Justice Depart- 
ment. I would greatly prefer that the 
city be forced to continue taking new 
prisoners, and face up to the contempt 
citations that will follow. But if that is 
not possible, then the Justice Depart- 
ment may hold the only solution to 
the crisis at hand. 

If the city cannot be forced to accept 
new inmates, then I believe they 
should be taken into the Federal 
system, rather than be set free or sit 
in the basement of the courthouse 
downtown. I hope that Attorney Gen- 
eral will act positively on this request. 

I ask unanimous consent that my 
letter be printed in the Record. 

There being no objection, the letter 
was ordered to be printed in the 
Record, as follows: 

U.S. Senate, 
Washington, DC, October 5, 1988. 
Hon. Richard Thornburgh, 
Attorney General, U.S. Department of Jus- 
tice, Washington, DC. 

Dear Dick: I write to ask your urgent at- 
tention to the District of Columbia's deci- 
sion not to admit newly sentenced inmates 
into its prison system. 

As you know, the city's Director of Correc- 
tions announced last night that District 
prisons are too overcrowded to permit ac- 
ceptance of additional inmates. I know that 
you share my concerns about the adverse 
impact of that decision on public safety in 
this area, and I urge that you begin accept- 
ing those newly sentenced inmates into the 
Federal prison system. 

I understand fully that this crisis is not 
the fault of the Federal government. The 
U.S. Department of Justice has been most 
generous toward the D.C. prison system and 
already houses more than 2,000 of its in- 
mates.' 

Like you, I would greatly prefer that the 
city be forced to accept new prisoners and 
face the contempt citation that will follow. 
Nevertheless, I know that may not be possi- 
ble and that the resulting choice we may 
face is a stark one: either admit D.C.'s newly 
sentenced prisoners into the Federal system, 
or risk letting them go free. 

The Washington Metropolitan area, and 
Northern Virginia in particular, have al- 
ready suffered greatly because of the Dis- 
trict government's mismanagement of its 
prison population. Escapes have been fre- 
quent and other disturbances at Lorton Re- 
formatory are a source of constant concern. 

The District's latest decision compounds 
those problems and further threatens the 
public safety. I urge that you act swiftly to 
limit that threat by taking newly sentenced 
inmates into the Federal prison system. 

This step will help alleviate the immediate 
crisis that the District government has cre- 
ated. I hope that you will support it and 
that we can work closely together to devise 
a long-term solution to the District of Co- 
lumbia's prison problems. 
Sincerely, 

Paul Trible. 



FRANKLIN DELANO ROOSEVELT, 
JR. 
Mr. COHEN. Mr. President, I would 
like to pay tribute to a special friend 
who recently passed away. Franklin 
Delano Roosevelt, Jr., the son of our 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28327 



late President, died recently on his 
74th birthday near his home in Mili- 
brook, N.Y. 

Franklin was the fourth of President 
and Mrs. Roosevelt's six children. He 
was born at his family's summer estate 
on Campobello Island, which is just 
across the Canadian border from 
Lubec, ME. During World War II he 
distinguished himself by admirable 
service to his country, commanding a 
Navy destroyer and winning the 
Purple Heart, Navy Cross, and Legion 
of Merit medals. 

Franklin Roosevelt served three 
terms in Congress, representing his 
New York district from 1949 to 1955. 
He also worked in two Presidential ad- 
ministrations, beginning as Under Sec- 
retary of Commerce under President 
Kennedy and continuing his service 
under President Johnson. Later he 
built a successful business career 
based in New York City. 

I had the pleasure of serving with 
Mr. Roosevelt and our former col- 
league, Ed Muskie, on the commission 
overseeing the Roosevelt Campobello 
International Park located at the site 
of the Roosevelt family's summer 
estate. The park was established 24 
years ago as a joint memorial by the 
United States and Canada to President 
Franklin Roosevelt, who spent many 
summers there. 

Senator Muskie delivered an elo- 
quent and poignant address at Mr. 
Roosevelt's funeral in New York City. 
I ask unanimous consent that Senator 
Muskie's remarks be inserted in the 
Record. 

There being no objection, the re- 
marks were ordered to be printed in 
the Record, as follows: 

Franklin D. Roosevelt, Jr., Memorial 
Service 

(Remarks by Senator Edmund Muskie) 

By pure happenstance, the Roosevelt 
Campobello International Park Commission 
held its summer meetings this year in June. 
There was some quiet grumbling that we 
had rushed the season, that the gardens 
had not reached the familiar brilliance of 
August which is when we often have met in 
the past. But, we realize now that we would 
not have had Franklin with us in August. So 
we can be grateful. 

He was in typical form at our June meet- 
ing, having taken a close look in advance at 
some of the construction work that had 
been done in our absence throughout the 
Park's natural areas. He was the first to 
report. He was disturbed by the appearance 
of the Glensevern Road which had lost 
some of its original beauty in the process of 
being upgraded. His Commission colleagues 
promised they would give it their scrutiny. 
He had another minor complaint; the 
crushed stone footpath to the Johnston 
Cottage, where he was staying, left a residue 
on shoes and it was being tracked into the 
Cottage. He worried constantly about a 
breakdown in zoning that might bring un- 
sightly commercial intrusions to the Park 
area. 

It was not that he opposed change but 
any changes that were to come to Campo- 
bello in his 24 years as one of the original 



United States Commission members had to 
comport with the ambience of his father's 
"Beloved Island"— and his own. 

Franklin was born on the Island 74 years 
ago and returning, year after year to help 
oversee the development of this unique me- 
morial to FDR, he had a perspective that 
none others of us had, a special devotion to 
the soil and the vistas and the people of the 
Island. In that respect, it can truly be said 
he was "beloved by the Island." 

He enjoyed taking first-time visitors down 
the old drives and recapturing his youth. So 
much of it was still there. He could recall 
many associations with Campobello Island 
including the terrible night of August 10, 
1921, when his father contracted polio on 
the Island. Speaking at a ceremony on the 
100th anniversary of his mother's birth, 
Franklin noted that his father came back on 
only three occasions after the polio. "My 
mother then took up his beloved Island and 
came back many times. I think she came 
back to recharge her batteries." 

One always had the feeling that Franklin, 
Jr. was recharging his batteries when he 
came back to Campobello. And, for the rest 
of us, the Roosevelt presence at the Com- 
mission meetings always got our own juices 
flowing. He was concerned about the proper 
development of the Park and we shared his 
concern. He worried about preserving its 
beautiful views and clean air and we shared 
his worries. He cared about the people who 
were employed by the Commission and they 
cared about him because he was one of 
them. It was he who made sure that they 
had an acceptable working agreement with 
the Park. They will miss him as much as his 
fellow Commissioners. 

The public cannot imagine some of the 
wrangles the Commission got into behind 
closed doors when Franklin's stubborn de- 
termination made us think twice about our 
decisions. But we remember best the laugh- 
ter and the camaraderie around the confer- 
ence table in the glory days when Grace 
Tully and Jim Rowe, who worked at the 
White House with FDR, would invoke 
memories of New Deal events and personal- 
ities and delight all of us with first-hand re- 
ports of those days. 

There came a time when because of my 
State Department appointment, I had to 
suspend my activities with the Campobello 
Commission. It has been my lot to assume 
the chairmanship every two years, alternat- 
ing with the Canadian aide. Thus it was on 
July 19, 1980, that Franklin was elected 
chairman, vowing that he would make every 
effort to reinstate me to that role at the 
earliest opportunity. Well, that time came 
early the next year. Meanwhile, a Roosevelt 
was in charge at Campobello and I think 
the Island slept better at night. 



they are interested in perfecting what 
we have offered. 

I just wanted to serve notice on the 
Senate that this bill is very important. 
It is important not simply to the 
banks; it is more important to all 
groups that raise money— the home 
builders, it is vital for them; it is im- 
portant for the corporations of this 
country that raise capital; it is impor- 
tant for our States; it is important for 
our counties and our cities. It will 
make a big difference on the basis of 
very careful studies that we have had 
on this. 

As I say, this bill passed the Senate 
overwhelmingly, 94 to 2. It is the kind 
of action that we should try to accom- 
plish this year if we possibly can. 

I simply wanted to serve notice that 
I intend to press hard for that legisla- 
tion in the concluding days. I think it 
would be a tragedy for this country if 
we did not enact it. I am sure when it 
comes to a vote in the House it will 
also pass and by an overwhelming 
vote. We want to do our best to see 
that it does come to a vote. 



THE BANKING BILL 

Mr. PROXMIRE. Mr. President, as 
Senators know, we passed a banking 
bill by a 94-to-2 vote earlier this year. 
In fact, it was last March. 

That bill has been tied up for juris- 
dictional reasons in the House. We 
think we have solved the jurisdictional 
reasons but it will take an action by 
the Senate in order to pass it. And I 
think we can do it in a relatively short 
time. 

There are a number of Senators who 
understandably have holds because 



NOTE 
(In the Record of September 



29, 



1988, the remarks of Mr. Rockefeller 
contained errors typographical in 
nature. The permanent Record will be 
corrected, as follows: ) 

Mr. ROCKEFELLER. I thank the 
Chair. 

Mr. President, this is an historic day 
for the Senate, the welfare system, 
and in the career of Daniel Patrick 
Moynihan. We are close, ever so close, 
to passing legislation that has eluded 
passage for the past 20 years. We have 
finally reached a bipartisan consensus 
on a way to reform the welfare system, 
something many people thought was 
absolutely impossible. 

I urge my colleagues to vote affirma- 
tively for this bill so that poor families 
in this country will not have to wait a 
minute longer for the help they so 
desperately need to improve their 
lives. I personally am very pleased to 
have been part of putting together 
this welfare reform package. 

Much has already been said about 
Senator Moynihan and much more 
will be said, not only today but in the 
future, in the many books that will be 
written about his accomplishments. 

(Mr. MOYNIHAN assumed the 
chair.) 

Mr. ROCKEFELLER. But I want to 
add my comments. As his friend, ad- 
mirer, and fellow member of the 
Senate Finance Committee, I have 
been truly inspired by Senator Moyni- 
han's commitment to helping people. 
He would not let us conferees forget 
how far this bill does go in improving 
the lot of the very poorest of Ameri- 
cans. Senator Moynihan would con- 
stantly remind us of reality. He would 






28328 

remind us that we had work to do, 
that there were people in need, and we 
could help them. 

So I thank the distinguished Presid- 
ing Officer, Senator Moynihan, for 
your inspiration, for your foresight, 
for your commitment, for your tenaci- 
ty, for your writings, for your poetry, 
and for your nature. And I will stop at 
that. 

What makes this bill remarkable in 
many ways is that it is truly biparti- 
san. The White House played a con- 
structive role throughout the process. 
Senator Bentsen took time from the 
campaign trail to work on this bill. I 
also would like to commend Senator 
Dole for his intuitive and instinctive 
compassion for people; Senator Pack- 
wood for his wisdom and ability to 
think of ways to get things done when 
others cannot; Senator Armstrong for 
his very humanistic and pragmatic ap- 
proach to overcoming stumbling 
blocks; and Senators Pryor, Daschle 
and Wallop, for their tireless efforts 
to see this bill through to the end. 
This is an exciting moment in our 
country's history. 

Our welfare system sorely needs a 
new direction. We have failed to pro- 
vide the opportunity for all Americans 
to educate themselves, earn a decent 
living, and live a life of dignity. The 
welfare system has deteriorated to a 
meager cash assistance program that 
does little in the way of education, 
jobs training, or work experience— es- 
sential ingredients to helping poor 
men and women become prepared for 
and part of the work force. 

With this bill, we can reshape and 
reform our current welfare system to 
one that will truly affect the lives of 
many of our poorest families. 

Federal funding for our current em- 
ployment and training program for 
welfare recipients— called the WIN 
Program— has been cut, Mr. President, 
by 80 percent since 1981. We can re- 
verse that trend today. This bill will 
make $600 million available in the 
first year for important education and 
training programs. 

Substantial research conducted in 
recent years, has demonstrated that 
we simply must devote more resources 
upfront if we are going to make a real 
difference in welfare families' lives. 

Although 1987 represented the fifth 
year, Mr. President, of economic recov- 
ery for this Nation— the economic re- 
covery left many poor Americans 
behind. In 1987, there were 8 million 
more poor people than there were in 
1978. 

What I find truly shocking is the 
striking increase in the number of 
children living in poverty. Some 13 
million children were poor in 1987, 
compared to 9.9 million in 1978. That 
is the wrong direction. This bill will 
help to change that. 

Mr. President, it is time to change 
the system throughout the country— 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



in every State and on behalf of every 
one of the 32.5 million Americans 
living in dismal poverty. In order for 
this to happen, we are simply going to 
have to invest more money in the nec- 
essary programs. 

I say "invest," as my predecessor, 
Senator Randolph used to say so fre- 
quently, because there have been real 
signs of hope from pilot projects that 
have spent money on education and 
training for AFDC recipients. 

These initial investments will pay 
off in the long term as former welfare 
recipients become employed and earn 
wages and pay taxes. 

I, along with my distinguished senior 
colleague, the majority leader, Senator 
Byrd, represent a State that is among 
those that needs this bill the most. 
West Virginia continues to have an ex- 
traordinary high rate of poverty and 
an extraordinary high rate of unem- 
ployment. Many people have left West 
Virginia to find employment in other 
States. 

This year, Mr. President, in an aver- 
age month, over 50,000 households in 
West Virginia receive AFDC benefits. 
They received through AFDC an aver- 
age of $223 a month. Just imagine 
living on $223 a month. 

I am extremely offended by state- 
ments made by some that poor people 
will not work; that welfare is perma- 
nent; that there is a welfare psycholo- 
gy that precludes people from having 
ambitions, from caring about their 
children, from caring about their lives. 
I reject that. 

When I first went to West Virginia a 
quarter of a century ago, I worked 
with unemployed coal miners in com- 
munities where as many as 50 families 
out of 56 were on welfare. 

I sometimes went with them into 
what we call in West Virginia punch 
mines or dog holes. These are coal 
mines that are closed, have been 
worked out, and totally unsafe. These 
coalminers would go in with newspa- 
pers wrapped into a funnel, pour in 
some rock dust, put in a little powder, 
put in a fuse, light the fuse, go around 
the corner of the wall and wait for the 
explosion to go off so rock and maybe 
some coal would come down. They 
would pick out the coal and hope they 
could deliver enough to a tipple so 
that they could make $8 a day. 

Why do men do this? Why did they 
do it then? Why do some do it now? 
Because they want to support their 
families; because they want to live in 
dignity. 

They want to work, but they lack es- 
sential training. Tell me how you go 
down to Union Carbide in south 
Charleston and apply for a job when 
you cannot add or subtract, you can 
barely read, and you cannot even 
admit that to yourself? 

I remember many families when I 
was a VISTA worker in West Virginia, 



whose children did not go to school be- 
cause they were needed at home. 

You have to break the cycle, you 
have to cut into the cycle and give 
people education and training and 
hope. People, at least in my State of 
West Virginia, want to work. 

The Family Security Act will signifi- 
cantly increase the funds available to 
West Virginia and the rest of the 
States to help children and their par- 
ents escape poverty. 

The bill begins logically, Mr. Presi- 
dent, with provisions to insist that fa- 
thers who can financially support 
their children, whether or not they 
live in a different household or in a 
different State, will do so. The statis- 
tics on child support collection in most 
parts of this country are extremely de- 
pressing. This legislation makes it 
clear that men and women who bring 
children into the world must accept re- 
sponsibility for them. 

A crucial section of this bill is the 
JOBS Program, with provisions that 
direct all States to design comprehen- 
sive work oriented services— that must 
include basic education, training, and 
work experience— for AFDC recipi- 
ents. 

For States, such as my own, it pro- 
vides the first opportunity— because of 
the funding levels proposed— for ex- 
tending this kind of constructive and 
positive assistance to citizens who are 
likely to be without a high school 
degree, without perhaps even the most 
basic math or science ability, and with 
little or no work experience. Again, 
you cannot get a job at Union Carbide 
if you do not know how to read a job 
application manual— or anywhere else. 
You cannot get a job in a coal mine, 
Mr. President. 

One final point about this part of 
the legislation. When I was Governor 
of West Virginia, Mr. President, I 
chose to implement something called 
the community work experience pro- 
gram—abbreviated as CWEP but 
dubbed by many as work fare. 

I want to comment on the debate 
about this method of assisting welfare 
recipients. 

The CWEP Program has been enor- 
mously successful in West Virginia. I 
do not understand, Mr. President, the 
concern expressed by many of my col- 
leagues that CWEP is a program 
meant to punish rather than help wel- 
fare recipients. I would once again like 
to emphasize that CWEP can be an 
important work experience and is an 
important work experience in West 
Virginia. 

Just this past week a film crew from 
Australia was in West Virginia docu- 
menting West Virginia's success in 
running their CWEP Program. I am 
very proud of the accomplishments of 
my State's work and training pro- 
grams where CWEP is but one of 
many programs to move an unem- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28329 



ployed individual toward the goal of 
full employment. 

Mr. President, there are also impor- 
tant transition benefits in this legisla- 
tion. These benefits will help ease and 
encourage a move from the welfare 
rolls to work. Child care is frequently 
cited as the biggest reason why many 
mothers coming off welfare are unable 
to go to work— one study found that 60 
percent of all welfare mothers listed 
lack of day care as a reason why they 
could not go to work. Almost a half 
million children a month will benefit 
from child care assistance provided by 
this bill. Helping mothers afford qual- 
ity day care is an essential element of 
assisting mothers move from welfare 
to work. 

Just as important, the length of time 
the entire family can receive health 
insurance is greatly expanded. Under 
current law, families receive 4 months 
of Medicaid coverage after leaving wel- 
fare. That is not very much. This bill 
guarantees a full year of health insur- 
ance coverage. Families will no longer 
have to choose between health insur- 
ance coverage for their children and 
themselves and going to work. 

I know there are some who say to 
wait for next year. I say let us do it 
now, Mr. President. This is a good bill. 
It is not perfect. But let us not waste 
this opportunity. We have accom- 
plished a tremendous feat and I do not 
think we should waste the opportunity 
we have at our fingertips to reform 
the welfare system. 

Again, I congratulate Senator Moy- 
nihan for this historical event. I be- 
lieve Congress has risen to Senator 
Moynihan's challenge of enacting leg- 
islation that will really make a differ- 
ence in the lives of the poorest fami- 
lies in America. 

I thank the Chair and I yield the 
floor. 



AMERICAN CIVIL LIBERTIES 
UNION 

Mr. THURMOND. Mr. President, we 
have heard much discussion lately 
about the various positions of the 
American Civil Liberties Union. 

Vice President Bush has criticized 
Governor Dukakis for boasting that 
he is a "card carrying" member of the 
ACLU. I have an article entitled 
"Where Does the ACLU Stand on the 
Issues?"; which outlines many of the 
positions of the ACLU. 

Mr. President, according to this arti- 
cle, if the ACLU had its way, we would 
not be able to protect our children 
from pornography or have metal de- 
tectors in airports. I encourage every 
American to read this article. I will ask 
unanimous consent that this article be 
included in the Record immediately 
following these remarks. 

Mr. President, the next President 
will have the opportunity to appoint 
many judges to the Federal bench. 



How these judges interpret the Consti- 
tution is of vital importance to the 
future of this Nation. 

Mr. President, if Mr. Dukakis is 
elected President, I believe we are 
likely to see many judges, with views 
similar to the ACLU, appointed to the 
bench. 

I urge every American to carefully 
consider this matter before they vote 
this November. 

I ask unanimous consent that the ar- 
ticle to which I referred be printed in 
the Record. 

There being no objection, the article 
was ordered to be printed in the 
Record, as follows: 

Where Does the ACLU Stand on the 

Issues? 

(By William A. Donohue) 

The subject of civil liberties is fast devel- 
oping into a major campaign issue as presi- 
dential candidates George Bush and Mi- 
chael Dukakis line up on opposing sides. In 
the middle of the controversy is the Ameri- 
can Civil Liberties Union, which has long 
been considered the nation's leading civil 
rights organization. 

Dukakis, who boasts he is a "card carry- 
ing" member of the Union, is thought to be 
generally supportive of the ACLU's posi- 
tions. Bush has recently opened fire on the 
group's record. The issue has been raised in 
the Bush camp that Dukakis, because of his 
affiliation, is likely to appoint ACLU- 
minded judges to the bench. 

But just where does the ACLU stand on 
critical issues? The organization has put out 
a policy guide, approved by the ACLU's 
board of directors, which constitutes the of- 
ficial voice of the Union, in effect, a set of 
directives that are acted upon by both the 
national organization and affiliates around 
the country. When an affiliate goes to 
court, for instance, it uses the policy guide 
as a basis for its actions. The policy guide 
includes 270 separate issues the ACLU has 
endorsed. 

The following I.Q. test is culled from the 
ACLU's most recent policy guide and pro- 
vides a basis for further discussion about 
the wisdom of its policies. 

Do you believe that all laws banning the 
sale and distribution of hard core pornogra- 
phy, including child pornography, should be 
declared unconstitutional? The ACLU does. 

The Union says it opposes "any restraint 
on the right to create, publish or distribute 
materials to adults, or the right of adults to 
choose the materials they read or view, on 
the basis of obscenity, pornography or inde- 
cency." And then adds that: "Laws which 
punish the distribution or exposure of such 
materials to minors violate the First 
Amendment . . ." (Policy No. 4) 

The ACLU says it does not support child 
pornography and maintains that it is per- 
fectly fine for the police to prosecute those 
who harm children. But it defiantly defends 
those who profit from child pornography. 
Indeed the ACLU's passion for defending 
the sale and distribution of child pornogra- 
phy led it to argue before the U.S. Supreme 
Court that child pornography is a form of 
free speech, protected by the 1st Amend- 
ment. 

Fortunately for the children, the high 
court rejected the ACLU's claims and 
agreed with the lawyers for Father Bruce 
Ritter's Covenant House (a shelter that 
serves children abused by the pornography 
industry). Child pornography, it was decid- 



ed, was not what James Madison had in 
mind when he wrote the 1st Amendment al- 
lowing free speech. The ACLU, it should be 
noted, receives funding from the Playboy 
Foundation. 

2. Do you believe that the film classifica- 
tion system, which designates movies G, PG, 
PG-13, R and X, constitutes censorship and 
should be eliminated? The ACLU does. The 
ACLU doesn't like the "restrictive impact on 
the marketplace of ideas" because of such a 
system, and says that "... experience has 
shown that ratings inevitably have serious 
chilling effects on freedom of expression." 
(Policy No. 18) 

Since its founding in 1920, the ACLU has 
repeatedly asserted that it defends the right 
of Americans to be free from government 
censorship, claiming that what private 
groups do is not a First Amendment consid- 
eration. Not true. It openly rejects even 
nongovernmental, non-censorship systems 
which merely identify for prospective view- 
ers (many of whom are parents) what the 
level of maturity is of various movies. 

The ACLU is particularly disturbed by the 
R and X ratings, contending that such 
labels discourage further production of 
these movies! It is upset that hotels and air- 
lines "frequently refuse to accept X-rated 
films." Children, of course, frequently board 
planes, and their parents hardly expect 
them to be subjected to "Deep Throat" 
while flying the friendly skies. The ACLU 
actually maintains that the rating system, 
"through its X and R ratings, interferes 
with the autonomy of the family. These rat- 
ings deprive parents of the right to deter- 
mine what films their children may see." 
The policy speaks for itself. 

3. Do you believe that a voucher system, 
or a policy allowing for tuitions tax credits, 
is unconstitutional and should be forbidden? 
The ACLU does. (Policy No. 88, sections c 
and e.) 

There have been many reports on the 
status of the public schools in the 1980s and 
none has been glowing. The urban poor, 
many of whom are black and Hispanic, have 
been ill-served, as virtually everyone agrees. 
One would think that an organization that 
proclaims its support for minorities would 
be leading the fight to enable the disadvan- 
taged to reject those schools they find un- 
satisfactory. 

Moreover, it is rather strange to see an or- 
ganization that never tires of boasting of its 
commitment to free choice (the ACLU is re- 
lentless in its defense of a woman's right to 
choose abortion, for example), leading the 
fight to deny parents the right to choose 
which schools they want their children to 
attend. But no, the ACLU's politics dictate 
that freedom of choice, in this case, be over- 
ruled. 

4. Do you believe that the display of a 
Christmas Creche or Menorah on public 
property is unconstitutional and should be 
forbidden, even if paid for with private 
funds? The ACLU does. 

Every December an ACLU affiliate files 
suit in a federal district court seeking to 
deny Christians and Jews the right to pub- 
licly express their religious beliefs. The 
same organization, which says that if people 
don't like to see pornography openly dis- 
played by street vendors "they can avert 
their eyes," refuses to adopt the same logic 
when applied to a Nativity scene or Meno- 
rah. In these cases, nothing less than cen- 
sorship will do. 

Similarly, the ACLU will defend the free- 
dom of any student to print obscenities in a 
school newspaper, but will not come to the 




28330 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



defense of those who wish to sing "Silent 
Night" in the classroom. In fact it will try to 
stop them. This is a classic example of its 
moral priorities. 

5. Do you believe that the words "under 
God" in the Pledge of Allegiance are uncon- 
stitutional and should be forbidden? The 
ACLU does. (Policy No. 84, section a.) 

There are some people who feel that reli- 
gious objectors should not be required to 
say the Pledge of Allegiance. The ACLU 
goes well beyond that position by literally 
stating that "The insertion of the words 
'under God' into the pledge of allegiance is 
a violation of the constitutional principle of 
separation of church and state." 

There are some officials in the ACLU who 
actually brag about their refusal to say the 
Pledge. Gara LaMarche, executive director 
of the Texas affiliate, has written that "The 
Pledge of Allegiance is not the essence of 
the Constitution. Not pledging is." To La- 
Marche, not pledging is more American 
than doing so because dissent is a Constitu- 
tional right. But rights entail responsibil- 
ities (though that is not something the 
ACLU likes to stress), and the essence of 
pledging is to affirm one's duty to country, 
not to affirm one's right to be a cad. 

6. Do you believe that churches and syna- 
gogues should be denied their tax-exempt 
status? The ACLU does. (Policy No. 92, sec- 
tion a) 

The ACLU is in court right now trying to 
deny the Roman Catholic Church its tax- 
exempt status. The problem? The Catholic 
Church preaches against abortion, and the 
way the ACLU sees it, that's a violation of 
its tax-exempt status. But the Catholic 
Church also preaches against murder, steal- 
ing, and adultery. So what? Aren't religious 
institutions entitled to freely express them- 
selves on matters of morality? 

Come to think of it, why hasn't the ACLU 
filed suit against Rev. Jesse Jackson for 
taking up a collection for his presidential 
campaign in the black churches of Chicago? 
The founder of the ACLU, Roger Baldwin, 
once told me that the Union's decision to 
strip churches and synagogues of their tax- 
exempt status was "very foolish." It's more 
than that: It's downright hostile to the free- 
doms traditionally understood to be both 
Constitutional and supportive of democratic 
society. 

7. Do you believe that all drugs should be 
legalized, including crack and angel dust? 
The ACLU does. (Policy No. 210) 

Survey data show that most Americans do 
not want to legalize drugs. Of those who do, 
few are in favor of legalizing every drug. 
There are some drugs, like crack and angel 
dust, that are so disabling and convulsive in 
their effect that almost no one wants them 
legalized. Furthermore, advocates of legal- 
ization usually specify that only certain 
people (e.g. those who have been "medically 
certified") should be able to obtain drugs. 
Finally, most proponents of legalization 
admit that their position is born of exas- 
peration with present policies, and is not de- 
rived from a school of liberty that includes 
the right to self -abuse. 

The ACLU differs in every respect. It 
wants all drugs legalized, stating that "the 
introduction of substances into one's own 
body" is a civil liberty. It is not against "rea- 
sonable regulatory restraints" but does not 
demand that any "reasonable regulatory re- 
straints" be levied before crack is legalized. 
And most revealing of all is the ACLU's 
philosophical belief that liberty includes 
the right to self-abuse, even when it is cer- 
tain that drug addicts cannot help but in- 



fringe on the rights of others by engaging in 
uncontrollably violent and deviant behavior 
and by burdening the taxpayers with enor- 
mous bills for their medical and welfare ex- 
penses. 

8. Do you believe that prostitution should 
be legalized, including street solicitation? 
The ACLU does. The Union bluntly "sup- 
ports the decriminalization of prostitution 
and opposes state regulation of prostitution. 
The ACLU also condemns the abuse of va- 
grancy or loitering laws or licensing or regu- 
latory schemes to harass and arrest those 
who may be engaged in solicitation for pros- 
titution." (Policy No. 211) 

There is very little public support for le- 
galization of prostitution. And with good 
reason: urban areas are already plagued 
with so many serious social problems that 
the idea of giving sanction to them is mad. 
It is an American phenomenon that where 
prostitutes congregate they act as a magnet 
for deviants and degenerates of all kinds. 
Drug addicts and muggers are drawn to 
these areas, making entire neighborhoods 
unsafe for families and consumers. 

Legalization would spare no neighbor- 
hood, as prostitutes, assisted by ACLU law- 
yers, would demand that the police observe 
their "civil liberties" by allowing them free 
rein. And in all likelihood, prostitutes would 
not target those communities where civil 
libertarian lawyers live, leaving them 
immune, once again, from the consequences 
of their ideas. 

9. Do you believe that curfew ordinances 
for juveniles are unconstitutional? The 
ACLU does. (Policy No. 206) 

Communities do not indiscriminately 
order kids off the street at night. In the 
rare case that curfews are employed at all, it 
is because a series of unusual events are 
seen to merit preventive action on the part 
of the police. For example, in 1981, after 
scores of black children were found missing 
or dead, Atlanta Mayor Maynard Jackson 
approved a law that ordered children off 
the streets after 9 p.m. According to the 
logic of the ACLU, Mayor Jackson was not 
acting in the best of interests of the chil- 
dren—he was flatly violating their constitu- 
tional rights. 

Once again, the Union's obsession with 
rights has blinded it from realizing that 
there are some occasions where the exercise 
of rights leads not to liberation, but to the 
loss of freedom. In this case, it was life itself 
that stood to be lost. 

10. Do you believe that sobriety road 
checks are unconstitutional and should be 
forbidden? The ACLU does. (Policy No. 217) 

In an attempt to apprehend drunk drivers, 
before they injure themselves or someone 
else, the police in many states have conduct- 
ed road checks, usually at bridges or toll 
booths where traffic is required to stop 
anyway. Here again, the ACLU has its blind- 
ers on to legitimate public safety concerns. 
No one doubts that it is intrusive for the 
police to stop and check drivers for driving 
under the influence of alcohol. But the in- 
trusion is minimal and, considering what is 
at stake, highly justified. The ACLU is even 
against the administration of a breathalyzer 
test, used as a spot check, to detect drunk 
drivers. (Policy No. 260) 

11. Do you believe that school officials 
should be denied the right to search the 
lockers of high school students for drugs? 
The ACLU does. (Policy No. 76) 

In this day and age of drug abuse, there 
has been tremendous public outcry in favor 
of cracking down on drug users. In particu- 
lar, the public favors greater scrutiny of 



high school students. But the ACLU objects. 
It wants principals to secure a search war- 
rant before student lockers can be checked 
for drugs, pretending, as it does, that a 
school locker is a sacred vestibule of priva- 
cy, off-limits to school authorities. 

12. Do you believe that all prisoners 
should have the right to vote, regardless of 
the nature of their offense, and that they 
should be allowed out of prison to vote at 
their last place of residence prior to confine- 
ment? The ACLU does. (Policy No. 241, sec- 
tion b-5) 

Convicted felons do not, and should not, 
have the same rights as others. They for- 
feited some of their rights when they chose 
to violate the rights of innocent people. If 
the people's representatives deem it wise to 
pass laws that deny citizenship rights to 
those who have yielded citizen responsibil- 
ities, that is as it should be. The ACLU not 
only wants to restore the rights to vote to 
all prisoners, regardless of the offense, it 
wants them to be allowed to vote at their 
last place of residence! 

13. Do you believe that all criminals, 
except those guilty of such crimes as 
murder or treason, should be given a sus- 
pended sentence with probation and sent 
back to the community from which they 
came? The ACLU does. (Policy No. 242) 

This is one of the more incredible policies 
of the ACLU. Aside from "the most serious 
offenses, such as murder or treason," no one 
should go to prison. The ACLU recommends 
that "a fine should always be the preferred 
form of penalty," though it is not clear 
what the appropriate fine might be for 
rape. The Union suggests that "re-integrat- 
ing the offender into the community" is the 
most appropriate correctional approach, 
meaning that those who prey on others 
should not be removed from the neighbor- 
hood of their victims. 

There is no way to understand the mind- 
set that is at work here other than knowing 
how the ACLU feels about prisons in gener- 
al, "Imprisonment is harsh," the policy 
reads, and that is why the ACLU prefers 
probation. According to the ACLU, "proba- 
tion maximizes the liberty of the individual 
while at the same time vindicating the au- 
thority of the law and effectively protecting 
the public from further violations of law." 
But the purpose of punishment is not to 
maximize the liberty of criminals, it is to 
minimize their liberties so as to maximize 
the liberties of the innocent. And it is hard 
to know how the law is vindicated by treat- 
ing muggers as if they were jaywalkers. 

14. Do you believe that all military per- 
sonnel should be granted an honorable dis- 
charge, including those found guilty of dis- 
honorable behavior? The ACLU does. 
(Policy No. 253, section 8) 

That's right. This is the official policy of 
the ACLU: "All service personnel should re- 
ceive one form of discharge, with no qualifi- 
cations." The reason? "Dishonorable, gener- 
al and bad-conduct discharges do not serve 
any reasonable military need and impose a 
heavy and unnecessary stigma upon the 
military ex-convict which follows the person 
throughout his or her civilian life and 
which seriously affects future employment 
opportunities." 

Does this mean that those guilty of trea- 
son, desertion, insubordination— even rape, 
robbery and murder— should be given an 
honorable discharge? Yes it does. Does this 
mean that all such persons would qualify 
for veterans' benefits? Yes it does. Does this 
mean that the ACLU believes that those 
who betray their country are entitled to ex- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28331 



actly the same rewards as those who earned 
the Purple Heart? Yes it does. Does this 
mean that if a service- • • • his crime 
should be expunged from his record. Yes it 
does: "No * * • for crimes committed in 
service should be made on the discharge 
form." Flat statement— those are the words 
of the ACLU. 

15. Do you believe that health profession- 
als should not be allowed to trace for AIDS, 
and that doctors should be prohibited from 
notifying unsuspecting persons that they 
might be infected with the deadly disease? 
The ACLU does. (Policy No. 268, sections A- 
6 and B-5) 

The ACLU is so wedded to the gay rights 
movement that it cannot objectively pass 
judgment on the issue of AIDS. It has re- 
sisted every conceivable effort to warn unsu- 
specting spouses that they might be infect- 
ed with the deadly disease. Janlon Gold- 
man, an official of the ACLU's Project on 
Privacy and Technology, has admitted 
where her bias lies: "The benefits of confi- 
dentiality outweigh the possibility that 
somebody may be injured." "May be in- 
jured" is ACLU-speak for die. 

According to the ACLU, the emergence of 
AIDS "as a major threat to public health 
has serious implications for civil liberties 
such as control over one's body, freedom of 
association and the right of privacy of one's 
medical records." Nowhere in ACLU policy 
is there the slightest hint that promiscuous 
behavior is linked to AIDS, or that sexual 
restraint ought to be practiced. In fact it 
says that "judgments about AIDS often 
become entangled with perceived issues of 
personal morality, particularly regarding 
sexual conduct and intravenous use of illicit 
drugs, as the virus linked to AIDS seems to 
be transmitted predominantly, though not 
exclusively, through those two means." (My 
emphasis.) The ACLU cannot even summon 
the moral courage to say that promiscuous 
sodomy and heroin use is wrong; it's just a 
perception that some people have. 

16. Do you believe that homosexuals have 
a Constitutional right to a) marry, b) oper- 
ate bathhouses, c) become foster parents, d) 
become a Big Brother, and e) engage in 
street solicitation? The ACLU does. (Policy 
No. 264 and lawsuits) 

The ACLU wants to eliminate every law 
that distinguishes between heterosexuals 
and homosexuals, allowing for no excep- 
tions. It wants the law to recognize same-sex 
"marriages" so that homosexuals may qual- 
ify for the same tax advantages that mar- 
ried men and women have. It wants employ- 
ers to extend to homosexual couples the 
same privileges they provide married cou- 
ples. 

It wants foster care agencies to rewrite 
their policies to accommodate the interests 
of the gay rights lobby. It wants to force 
voluntary associations to accede to homo- 
sexual demands. It wants to give homosex- 
uals the right to solicit sex on the street and 
then be permitted to go to a bathhouse, the 
very spot where AIDS was spread in the 
first place. In short, it wants to replace the 
mores of society with the mores of the 
ACLU. 

17. Do you believe that the existence of 
metal detectors in airports is unconstitu- 
tional and should be forbidden? The ACLU 
does, insisting that the "current practice of 
searching the persons and belongings of all 
individuals, simply because they wish to 
board an airplane, is completely inconsist- 
ent with . . . 4th Amendment principles." 
(Policy No. 270) 

According to the mentality of the ACLU, 
anyone who has boarded a plane in recent 



years has had his Constitutional rights 
stripped from him by merely walking 
through metal detectors. That's right. The 
danger that terrorists pose is subordinate to 
walking through a metal detector. Better to 
run the risk of being hijacked to Cuba than 
to have a security agent take a peek at the 
insides of our luggage. 

What is even more remarkable about this 
policy is the ACLU's inability to appreciate 
why the public favors keeping the defectors: 
"Perhaps the most troublesome aspect of 
the airport search question is the readiness 
with which most people, civil libertarians in- 
cluded, have accepted and indeed welcomed 
such procedures." No, the most troublesome 
aspect of the airport search question is the 
ACLU's readiness to sacrifice public safety 
to the idol of civil liberties. 

11. Do you believe that workfare, and poli- 
cies which require able-bodied adults to 
work as a condition for receiving welfare, 
are unconstitutional and should be forbid- 
den? The ACLU does. (Policy No. 318) 

Over the past decade, a consensus has 
grown among public policy analysts that 
welfare recipients ought to be required to 
work, if at all possible. The Reagan Admin- 
istration and both houses of Congress are in 
favor of some kind of workfare provision, 
and the sentiment in the liberal media has 
also been receptive to this idea. Indeed one 
would be hard pressed to find any responsi- 
ble organization that denies the merits of 
workfare. But look no more, for the ACLU 
is on record opposing any work requirement 
as a condition for receiving public assist- 
ance. Once again, the ACLU's fixation on 
rights is so total that it loses all interest in 
concomitant responsibilities. 

It is often said that although the ACLU 
frequently takes extremist positions, it is 
nonetheless vital to the country that it con- 
tinue to work in defending individual rights 
against governmental constraints. But this 
view suggests that a commitment to civil lib- 
erties must mean a commitment to extre- 
mism, for that is what the ACLU is all 
about— extremism. 

To be sure, anyone who believes in free- 
dom must necessarily believe in the rights 
of the individual. But are there not lines to 
be drawn? Aren't there other values that 
count in a free society, such as civility, com- 
munity and public safety? No one would say 
that because law and order is necessary to a 
free society, we must necessarily approve of 
everything done in its name. Why then is it 
acceptable to say that respect for civil liber- 
ties means respect for everything done in its 
name? 

The ACLU has been around since 1920, 
and over the past 68 years it has done many 
things that all Americans can be proud of, 
things which have helped to keep us free. 
Unfortunately the good deeds of the ACLU 
have too often been overshadowed by its ex- 
tremism, especially in recent years. It has 
yet to learn, as Madison once said, that "lib- 
erty may be endangered by the abuses of 
liberty as well as by the abuses of power." 



WORLD HABITAT DAY 
Mr. CRANSTON. Mr. President, the 
United Nations designated October 3, 
1988, as World Habitat Day. This 
year's theme is "Shelter and the Com- 
munity" in an effort to focus attention 
on the urgent need for increased sup- 
port for the urban and rural poor in 
developing countries and their efforts 



to improve their housing and quality 
of community life. 

The U.N. Center for Human Settle- 
ments [UNCHS] is responsible for co- 
ordinating and facilitating human set- 
tlement activities in the United Na- 
tions and is directly responsible for 
executing shelter and community de- 
velopment projects. 

UNCHS is working hard at bringing 
together some 58 countries to seek 
consensus on the dimension and seri- 
ousness of worldwide shelter and set- 
tlement problems and in developing 
reasonable and effective approaches to 
solutions. In New Delhi last April, rep- 
resentatives of some 58 nations agreed 
on a global shelter strategy for the 
year 2000. The strategy will be consid- 
ered by the U.N. General Assembly 
this month. Given the economic, social 
and political diversity of the UNCHS 
membership, getting consensus on the 
strategy was a significant accomplish- 
ment. 

However, the focus of World Habitat 
Day and/or the global shelter strategy 
should not be confined to developing 
countries. No country has solved its 
shelter problem. Adequate shelter for 
all citizens, especially the poor, re- 
mains a persistent problem and an elu- 
sive goal for every nation. It is an es- 
pecially difficult objective for the less 
developed countries where one-third 
of the population is homeless and the 
numbers are increasing. 

The UNCHS concluded that "despite 
efforts of governments and interna- 
tional organizations, more than 1 bil- 
lion people have shelter unfit for 
human habitation and that this 
number will increase dramatically 
unless determined measures are taken 
immediately." In 1987, the Interna- 
tional Year of Shelter for the Home- 
less, the work initiated by a host of na- 
tions and organizations confirmed the 
enormous dimension of shelter needs 
worldwide and mandated increased na- 
tional and international efforts to 
produce and deliver improved shelter 
for all, especially for the poor and dis- 
advantaged. 

World Habitat Day promotes the 
idea that countries can and should 
assist one another with technical and 
managerial expertise in getting shelter 
strategies in place and working, and 
that the United Nations can coordi- 
nate and facilitate efforts to encour- 
age all countries to have effective na- 
tional shelter strategies in place and 
working by the year 2000. 

Mr. President, as chairman of the 
Subcommittee on Housing and Urban 
Affairs and a member of the Foreign 
Relations Committee, I am pleased to 
have the opportunity to call the atten- 
tion of my colleagues to the objectives 
of World Habitat Day and to endorse 
those objectives and the work of the 
United Nations Center for Human Set- 



28332 

tlements to improve shelter and com- 
munity life throughout the world. 

Mr. BOND. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER (Mr. 
Sanford). Without objection, it is so 
ordered. 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



RETAIL COMPETITION 
ENFORCEMENT ACT 
The Senate continued with the con- 
sideration of the bill. 

Mr. BOND. Mr. President, once 
again I rise in opposition to S. 430, 
more specifically to the recent amend- 
ment which has been introduced to 
that bill. One of the sponsors in his re- 
marks concerning the amendment has 
described the amendment as "common 
sense, one that should make the bill 
acceptable to any Senator who is con- 
cerned about balancing the interests 
of the consumer in his or her State 
against the very legitimate concern of 
not opening up the floodgates of liti- 
gation." 

With all due respect, I believe that 
we all share a very strong interest in 
the welfare of the consumers of our 
respective States. Those of us who 
oppose this bill and the proposed 
amendment are not anticonsumer but, 
rather, see this bill for what it is, spe- 
cial interest legislation for those who 
want a statutory mandate to pursue 
groundless litigation at great expense 
to manufacturers and ultimately to 
the consumer. 

There is nothing in S. 430 that guar- 
antees low prices for the consumer. In- 
stead, this bill is about the level of 
proof necessary to prove a price-fixing 
conspiracy and about whether we 
should codify the per se rule for verti- 
cal price fixing. Obviously, the lower 
the level of proof, the easier it is to 
threaten expensive and time-consum- 
ing litigation. 

The amendment is described by the 
cosponsor as a further clarification of 
the bill that was reported out of the 
Judiciary Committee last winter. I do 
not believe the amendment clarifies, 
but only highlights the difficulties of 
this legislation. 

Although the amendment provides 
that there must be an agreement in 
order to prove a violation of sections 1 
and 3, the bill still allows a jury to find 
an agreement based on facts which are 
ambiguous as to whether an agree- 
ment actually exists. Nor does the in- 
clusion of a section precluding a jury 
from making implausible inferences 
correct the problems of the bill. 

Under the terms of the bill, the ex- 
istence of an agreement to set prices 
can be plausibly inferred from a com- 
plaint followed by a termination. 

The most troublesome aspect of this 
amendment, however, is the inclusion 
of language in section 3, subsection 
8(c) overruling the Supreme Court de- 



cision in the Sharp Electronics case. 
That decision was only issued last 
May. It has never been the subject of 
hearings before the Judiciary Commit- 
tee and was never considered by the 
committee in fashioning what is pres- 
ently S. 430. 

The ranking member of the Anti- 
trust Subcommittee and the Judiciary 
Committee, Senator Thurmond, has 
expressed his special concern that leg- 
islation as far reaching as this not be 
enacted without considering the views 
of various antitrust experts who have 
experience in this area. 

In the Sharp case, the Supreme 
Court was asked to decide whether an 
agreement between a manufacturer 
and one of its retailers to terminate 
another retailer because of its pricing 
practices was per se illegal because it 
was an agreement to set prices. The 
Court held it was not because there 
was no agreement on price or price 
levels. 

It is worth noting that the propo- 
nents of the amendment claim that 
the Court held that there must be an 
agreement on a specific price or price 
level but that was clearly not the case. 
In fact, the court of appeals judgment 
which was affirmed specifically held 
otherwise, stating that the dealer 
"must expressly or impliedly agree to 
set prices at some level, though not a 
specific one." 

The Sherman Act will have its cen- 
tennial anniversary in 1990. I think it 
would be a tragedy indeed, if at the 
same time, because of unwarranted an- 
ticonsumer rhetoric, we were to enact 
legislation that was anticompetitive 
rather than procompetitive. The 
amendment that has been offered does 
nothing to eliminate the central objec- 
tion to the current evidentiary stand- 
ard of S. 430. Under this amendment 
there is still no evidence of agreement 
required to take a resale price fixing 
dealer termination antitrust case to 
the jury. 

Section 8(a)(1) of the amendment re- 
quires the court to find sufficient evi- 
dence of an agreement by the defend- 
ant in order to send the case to the 
jury. However, section 8(a)(2) of that 
amendment actually eliminates this 
requirement by stating that the court 
shall find that sufficient evidence of 
the agreement is present as long as 
the competitor's complaint was the 
major contributing cause of the dealer 
termination in question. 

Thus the Rudman-Wilson amend- 
ment still allows the jury to find an 
agreement based on facts that are at 
best ambiguous as to whether an 
agreement actually exists or could in 
fact find an agreement where there 
was no such agreement. 

It is also important to note that in 
addition to overruling the Monsanto 
decision as I said earlier, the amend- 
ment also directly overrules the Sharp 
Electronics case. The Sharp case had 



not been decided when S. 430 in its 
present form was drafted. Thus, even 
those who support its present form 
should note this significant addition to 
the controversy over S. 430. 

Mr. President, there has been a good 
deal of discussion about the competi- 
tive impacts of this measure, the need 
to protect discount stores and custom- 
ers of discount stores. I happen to be 
one who has patronized discount 
stores and I expect to do so in the 
future. 

I do not believe that this bill is nec- 
essary to ensure the health of the dis- 
count store industry, nor is it neces- 
sary to protect the right of customers 
who patronize discount stores. This 
measure, as I have stated before, will 
result in increased litigation. The costs 
of that litigation are costs that ulti- 
mately are going to have to be passed 
on to consumers. 

When S. 430 was initially intro- 
duced, its sponsor told us that we 
should pass the bill in order to allow 
consumers to maintain their right to 
shop at discount stores. It was implied 
that if we failed to pass S. 430, con- 
sumers would lose that right to save 
money by shopping at discount stores. 
The sponsor, the distinguished Sena- 
tor from Ohio, on June 29 on the floor 
said specifically: 

The issue is: Do you want your constitu- 
ents to pay higher prices or lower prices? Do 
you want your constituents to have the 
option of shopping around for the best 
price— or will they have no choice on price? 
I feel pretty conf ortable in venturing 
a guess that all of my colleagues favor 
choice and lower prices. If those were 
indeed the issues, then I would be a co- 
sponsor of the bill, and I am sure the 
Senate would probably pass it 100 to 
nothing. But I must point out to my 
colleagues once again— and I apologize 
for belaboring the point but it is an 
important point that bears repeating— 
the questions that the sponsor of the 
bill has asked are not the issues that 
are raised by the bill. S. 430 does not 
mandate lower prices for our constitu- 
ents. 

S. 430 does not mandate that dis- 
count stores exist. In fact, nowhere in 
the text of S. 430 does the term "dis- 
count store" appear. What S. 430 actu- 
ally does is make it much more diffi- 
cult for a manufacturer to terminate 
his business dealings with a retailer. I 
think we would all agree that a manu- 
facturer has— and should continue to 
have— this right. And I also should 
note these terminations normally 
occur because of poor service, fraud, or 
noncompliance with the contract. 
However, what this bill would do is in- 
crease the number of lawsuits that 
arise as a result of dealer termina- 
tions. Thus S. 430 is not proconsumer, 
it is prolawsuit. The Senator from 
Ohio has said that this bill should be 
known not as "The Retail Competition 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28333 



Enforcement Act," but rather as "The 
Consumers' Rights Bill." In my 
humble opinion, a more appropriate 
title would be "The Lawyers' Relief 
Act of 1988." 

Naturally, no one wants to be a sup- 
porter of a prolawsuit bill. In fact, the 
Senator from Ohio has spent much 
time on the floor this session saying 
that he did not want another piece of 
legislation— the plant closing bill— to 
become a lawyers' relief act. There- 
fore, it is not surprising that he has 
tried to couch the debate unfortunate- 
ly in terms of the consumer because it 
does not assist the consumer. 

The Senator from Ohio has shown 
us charts and graphs detailing how a 
consumer in his State can save an av- 
erage of $550 per year by shopping at 
discount stores. I have little doubt 
that these figures are accurate. In fact 
this accounts for the tremendous 
recent growth in the discount indus- 
try. 

As I have noted in previous state- 
ments, the Senator from Ohio has told 
us many things about the discount in- 
dustry. He has told us about the im- 
portant role that it plays in the lives 
of many shoppers. I know my col- 
leagues have heard it before, but I am 
from Missouri— the Show Me State— 
and if my colleague from Ohio wants 
me to believe that we need S. 430 to 
save the very important discount in- 
dustry, then he is going to have to 
show me. 

Mr. President, my friend from Ohio 
creatively has built his case for this 
bill by implying that if we fail to pass 
S. 430: One, that discount stores will 
go out of business, two, that we will no 
longer have the option to do our shop- 
ping at discount stores, three, that 
consumers will have to pay more for 
their purchases and, four, that per- 
haps the sky will fall on us all as well. 
They would be compelling argu- 
ments, if they were true. Fortunately, 
the statistics I have seen not only 
refute the Senator's dire predictions, 
but entirely reject his gloom and doom 
scenario. 

Supporters of S. 430 seem to believe 
that without this bill, the discount in- 
dustry will wither and die. They seem 
to be arguing that the U.S. Supreme 
Court's ruling in Monsanto versus 
Spray-Rite Service Corp. will cause 
this terrible occurrence. Thus a major 
thrust of their bill— section 8(a)— over- 
turns the Supreme Court's unanimous 
decision in the Monsanto case. 

Now, Mr. President, many people 
may forget that this case was decided 
in 1984. This means that we have had 
a 4-year laboratory to see how the de- 
cision has affected discounters. If 
indeed that unanimous decision is 
wreaking unimaginable havoc upon 
the discount industry, then we should 
see the negative impact reflected in 
the balance sheets of the Nation's dis- 
counters. Common sense dictates that 



we would observe a volatile combina- 
tion of market share declining, expan- 
sions slowing, and stores closing. If 
that were the case, than after review- 
ing these facts we in Congress could 
review the Supreme Court decision 
and draft legislation accordingly. 

But, what if instead we find that the 
discount business has been booming 
since 1984? 

What if we find that market share is 
expanding, sales are up and new stores 
are opening all over the country? 

Well, I would argue we certainly 
don't need to fix something that "ain't 
broke." 

Mr. President, the facts speak for 
themselves. Discount Merchandiser, 
the professional journal of the dis- 
count retailing industry reports that 
sales volume for all discount stores in- 
creased from $62.2 billion in 1984 to 
$74.6 billion in 1987. The number of 
discount stores in the country rose 
from 8,738 to 9,402. 

According to the magazine, "In 
terms of dollar volume, discount stores 
are the largest retailers of housewares 
and gifts, infants' wear, domestics, 
automotive accessories, small electric 
appliances, and stationery and greet- 
ing cards. They are the second leading 
retailers of camera and photo supplies, 
sporting goods, lawn and garden prod- 
ucts, and toys and consumer electron- 
ics." 

The report also gives even more spe- 
cific information on individual dis- 
counters. Let me discuss a few of those 
statistics. 

K-mart is the largest discounter in 
the country with more than 2,100 
stores. According to the journal, more 
than half of all adult Americans shop 
at K-mart at least once a month. Last 
year 36 new stores were added to the 
chain. 

Another leading discounter is 
Target, which has 317 stores in 24 
States. Despite the existence of the 
much maligned Monsanto ruling, 
Target managed to add 73 new stores 
during 1987, and company officials 
plan to open 25 more in 1988. 

Zayre Stores is another major dis- 
count chain, which, in 1987, reported 
sales of $3.3 billion. By the end of this 
year the company will complete con- 
struction of two new distribution cen- 
ters, covering more than 2 million 
square feet; and approximately a 
dozen new stores will open as well. 
Let us look at just a few more. 
Ames stores had sales of $2.1 billion 
at its 342 locations. Twenty-one new 
stores were opened during 1987. 

Bradlees has a net expansion of 
eight new stores to bring its total to 
169 units. 

Hills Department Stores opened 15 
new stores in 1987. Pay Less Drug add 
47 stores. Rose's Stores continued in 
its effort to add 20 to 25 new stores 
per year through 1990. Venture 
opened six new stores and plans four 



more for 1988. Shopko added 10 and 
plans to open another 10 by the end of 
this year. The list goes on and on. 

I ask my colleagues, does this look 
like an industry in trouble? Does this 
look like an industry withering on the 
vine, praying for Congress to inter- 
vene? I think not. 

Mr. President, to me this looks like a 
classic example of "if it ain't broke, 
don't fix it." And it is clear that this 
bill is not needed to save the discount 
retail industry from extinction. The 
industry is doing just fine and certain- 
ly will continue to do so. But if S. 430 
is not needed to save the discounters, 
then what does it really do? 

Mr. President, the discount indsutry 
is concentrated among several dozen 
large chains. According to Discount 
Merchandiser, the largest chains— 
those with 50 stores or more— control 
80.6 percent of industry sales. These 
chains— K-mart, Target, Bradlees, 
Zayre— are the stores where our con- 
stituents are going to save the $550 to 
which the Senator from Ohio has re- 
ferred. If manufacturers want to sell 
their products— and we know they 
do— they are going to sell these chains 
whether we pass this bill or not. 

Manufacturers of infants' wear, for 
example, are not going to stop selling 
to discount stores which sell almost 38 
percent of all infants' clothes. 

General Electric is not going to stop 
selling to discount stores when one- 
third of all electric appliances are pur- 
chased there. 

Mattel certainly is not going to cut 
off discounters at a time when 34.4 
percent of toys, hobby goods, and 
games are purchased at discount 
stores. 

I could go on all day giving exam- 
ples, but I believe I have made my 
point. Discounters play too big of a 
role in the overall retailing picture to 
be cut off by manufacturers without 
an extraordinary good reason. 

However, I can hear S. 430 support- 
ers saying, "Well this may be true for 
the large discounters which make up 
the overwhelming majority of the in- 
dustry, but what about small discount- 
ers, those with just a few or even just 
one store?" My response is that unfor- 
tunately, their bill could create serious 
problems for these folks if it were to 
become law. Again, Washington is 
pushing a remedy that is worse than 
the imagined disease. 

With the law as it currently stands, 
manufacturers are aggressively selling 
to discounters; more so after the Mon- 
santo decision than before, and we 
have no reason to believe that will 
change at any time in the foreseeable 
future. Thus, with or without S. 430 
enacted into law, it is unlikely that 
manufacturers will move to terminate 
their existing relationships with dis- 
counters, unless of course fraud or 




28334 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



mismanagement or some other legiti- 
mate dispute occurs. 

However, it seems clear that if S. 430 
is the law, they will be very hesitant 
about contracting with new discount- 
ers—large or small— for fear of future 
litigation. Facing the possibility of an 
expensive legal battle to terminate a 
retailer who does a poor job, a manu- 
facturer will have little incentive to 
take a chance on selling its product to 
a small discounter who because of its 
small volume will add little to the 
manufacturer's balance sheet. Thus it 
will be the small discounters who will 
have trouble buying merchandise, and 
it will be the small dealers who will 
now have an even tougher time com- 
peting with the larger chains such as 
K-mart and Zayre. 

The end result is that after passing 
S. 430, consumers will have fewer dis- 
count stores to shop at— not more. 
This is the great irony of this debate. 

S. 430 is not a "save the discounters" 
bill. It is a bill which tells manufactur- 
ers that they better make darn sure 
they want the new distributors they 
choose because they will need 5 to 10 
years, a couple of million dollars, and 
several teams of lawyers to terminate 
any dealer they believe is not fulfilling 
its contract. 

The supporters of this bill may say 
this is a good thing— perhaps they be- 
lieve we have the correct mix of dis- 
tributors in place today and that we 
should, therefore, freeze from the 
marketplace any more. 

Perhaps supporters of S. 430 do not 
really want to think that the very 
tough evidentiary standards required 
by this bill will put a damper on manu- 
facturers' enthusiasm for new dealers. 

Perhaps they have listened too long 
to the complaints of those discounters 
who have lost in court while the rest 
of the industry was merrily expanding. 

Perhaps they believe that vertical 
integration manufacturers creating 
their own outlets, cutting out the inde- 
pendent distributors is the way retail 
goods should be sold. 

But I hope that for whatever reason, 
my colleagues do not support S. 430 
because they believe that that in itself 
would save their constituents $550 a 
year. If they do they are truly buying 
a pig in a poke. 

Mr. President, the area of resale 
price maintenance price fixing is a 
very complex one. We have discussed 
this measure before. As it comes up 
and as the debate continues, there is 
much more that I will have to say 
about it if we are to continue on this 
bill. 

I think it would be necessary to look 
into the background, the judicial deci- 
sions and examine at length both the 
original S. 430 and the amendment 
particularly in light of the new Su- 
preme Court cases that have been 
issued on this subject. 



If that in fact is the decision, I will 
join with my distinguished colleagues 
from South Carolina and others in as- 
suring that we have a full and fair dis- 
cussion of all of these relevant issues. 

I yield the floor. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER (Mr. 
Sanford). The clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. METZENBAUM. Mr. President, 
I ask unanimous consent that the 
order for the quorum call be rescind- 
ed. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. METZENBAUM. Mr. President, 
this bill has been debated quite a bit. 
My colleagues and I have repeatedly 
explained that this bill is needed to 
protect consumers and small business 
people. It gives consumers the right to 
buy at a discount. That is the long and 
the short of it. 

After the recent Supreme Court de- 
cision, manufacturers are moving to 
squeeze out those discount operations 
and say to them, "you sell our prod- 
ucts at the higher price or else you are 
not going to be able to get the prod- 
uct." 

This gives consumers the right to 
shop for the best deal, and frankly, I 
do not understand why anyone would 
oppose it unless there is some reason 
to defend the largest corporations in 
America who are distributing those 
products. 

Furniture dealers came in to see me 
from North Carolina the other day 
and said, Senator, we are losing, we 
are being forced out of business, be- 
cause we operate on a discount basis, 
and unless we get some protection 
from the U.S. Congress we will be out 
of business and our customers will 
have to be paying a higher price. 

I did a study through my staff of 
what it means to have a right to buy 
at a discount. I found that the average 
Ohioan would pay about $550 more if 
they could not buy in discount stores 
because we compared the prices in the 
discount operations with the prices of 
the merchants who were not selling at 
a discount. 

Contrary to the claim of my col- 
league from Missouri, recent events 
show an even greater need for this leg- 
islation. 

Let us see where we are. In May of 
this year, the Supreme Court decided 
a case called Sharp. The Sharp case 
held an agreement to cut off a dis- 
counter because it is charging lower 
prices is not automatically anticom- 
petitive. In other words, an agreement 
of the manufacturer with a merchant 
to cut off a discounter because the dis- 
counter is charging lower prices is not 
automatically anticompetitive. If that 
is not anticompetitive, I do not know 
what could be. 



It is hard to imagine a more anti- 
competitive agreement than that one. 
Why is it anticompetitive? The re- 
sults of the agreement are that maver- 
ick businesses, discount operators, usu- 
ally small businesses, are cut off, they 
are put out of business. The consum- 
er's choice on where to shop is re- 
duced. The consumer's right to shop 
around for the best deal is meaning- 
less without stores that charge dis- 
count prices. 

So, the agreement clearly hurts com- 
petition and consumers, even though 
the Supreme Court does not consider 
it automatically anticompetitive. We 
can already see the harm caused by 
this decision. 

I have been visited by many small 
business entrepreneurs who have been 
cut off without good reason since the 
Sharp decision. Small businesses have 
been hurt, have been cut off, and the 
ability of consumers, including senior 
citizens, to stretch their income and to 
make it go further, has been jeopard- 
ized. 

Let me tell you some examples that 
I have been told about since the Sharp 
case. I mentioned the North Carolina 
family that was in the furniture busi- 
ness for 103 years, and they were cut 
off by several major suppliers. No 
reason was given. I understand this 
family business gives its customers the 
best deal possible on furniture by 
charging lower than suggested retail 
prices. Now, that family business is 
threatened with bankruptcy. 

I did not know these people when 
they came to my office. They came 
and asked for an appointment, and I 
was willing to see them. I did meet 
with them, and I talked with them. 
Almost with tears in their eyes, they 
told me how they had fought for their 
business for 103 years, and now they 
are being forced up against the wall. 

A national catalog merchandiser 
charges discount prices. That is not 
unusual for catalog distributors. 
Within a week after the Supreme 
Court Sharp decision, five major appli- 
ance and computer electronics suppli- 
ers threatened to cut off the supplies 
of that catalog distributor if the com- 
pany did not charge higher prices. 

How can anybody come on this floor 
and make a case for the right of manu- 
facturers to charge higher prices and 
then argue that it is not anticon- 
sumer? 

Another case: An association of serv- 
ice station dealers report threats of 
short supplies if the independent deal- 
ers discount premium unleaded gaso- 
line. 

There are more examples. 

Mr. President, I ask unanimous con- 
sent to print articles from the Chris- 
tian Science Monitor and by Jack An- 
derson in the Record at this point. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28335 



There being no objection, the mate- 
rial was ordered to be printed in the 
Record, as follows: 

[From the Christian Science Monitor, July 
8, 19881 

Discounters Say Supplies Have Been Cut 

Since Supreme Court Ruling 

(By Kerry Elizabeth Knobelsdorff ) 

Washington.— In just two months, Priba 
Furniture's sales have dropped by 50 per- 
cent. 

Owner Priscilla Knox says that because 
her full-service store in Greensboro, N.C., 
sells upscale furniture at a discount, full- 
price competitors have pressured manufac- 
turers to restrict or cut off her supplies. 

Now, she can no longer sell certain lines of 
furniture and because of supplier restric- 
tions, can only sell other items to customers 
when they are actually in the store. 

A wide range of other discount retailers— 
home-entertainment companies, camera 
stores, shoe stores, and clothing factories- 
complain that since the Supreme Court 
ruled in May that vertical price fixing is not 
automatically illegal, they have felt a simi- 
lar squeeze. 

Although manufacturers deny any change 
in their behavior, some discounters say that 
"they've been informed by their suppliers 
that if they don't agree to sell their mer- 
chandise for at least as high as a minimum 
price, the supplier will terminate them," 
says Richard Kelley, a lawyer for the Na- 
tional Association of Catalog Showroom 
Merchandisers. (Catalog showrooms sell 
products at a lower cost than full-price 
stores. 

The practice of full-price retailers making 
their suppliers choose between them or 
their competing discounters has increased 
dramatically, he says, since early May, when 
the court ruled in Business Electronics Cor- 
poration vs. Sharp Electronics Corporation 
that vertical price restraints are not auto- 
matically illegal. Under the ruling, such al- 
legations must be judged on a case-by-case 
basis, and terminated companies have to 
prove in court that the termination harmed 
competition. 

The case arose when Sharp Electronics 
stopped supplying calculators to Business 
Electronics, which was selling them at a dis- 
count in the Houston area. Business Elec- 
tronics alleged that its supply was cut off 
because another Houston retailer— selling 
Sharp calculators at full price— complained 
to Sharp that it was being undercut. 

Michael Waldman, legislative director at 
PuDlic Citizen's Congress Watch, a con- 
sumer group, says a lot of retailers aren't 
protesting because they are afraid of alien- 
ating their manufacturers or prejudicing 
various pending legal cases. 

But reports of anticompetitive behavior 
have helped galvanize support for legisla- 
tion that would overturn the Sharp case, as 
well as its 1984 precedent, the Monsanto 
case. In that case, the court decided that a 
complaining discounter had to provide 
either direct or circumstantial evidence 
showing that a manufacturer and another 
retailer had knowingly conspired to fix 
resale-price levels. 
A bill that would overturn both decisions 

is awaiting Senate approval, having passed 

the House last year. 
Sponsored by Sen. Howard Metzenbaum 

(D) of Ohio, it would make vertical price 

fixing automatically illegal. To prove that 

vertical price fixing occurred, the terminat- 
ed retailer would only have to show prior 

communications between a competing retail- 



er and the supplier took place, and that this 
price agreement was a substantial cause of 
the termination. 

Manufacturers are fighting the bill. 

"It makes it a conspiracy for a manufac- 
turer to terminate a discounter in response 
to a request solicited from another retailer," 
says Gary Shapiro, vice-president of legal 
affairs at the Electronics Industry Associa- 
tion, an industry trade group. 

Both the Justice Department and the ad- 
ministration contend that the legislation is 
too broad, and that vertical price fixing re- 
straints have little effect on consumers, and 
may in fact prove beneficial. 

As far as consumer groups are concerned, 
though, the legislation will have a signifi- 
cant impact. 

To prove this, 11 consumer groups con- 
ducted a survey of popular summer mer- 
chandise that showed it is possible to save 
as much as 50 percent by buying through 
discounters. For example, a Weber "one 
touch" grill sells for over $119 in Odessa, 
Tex., but can be bought for about $59 from 
a discounter in the same city, according to 
the survey. Consumers can save an average 
of 24 percent nationally on a Sharp radio 
with compact-disc player bought from a dis- 
counter. 

The kind of anticompetitive activity elicit- 
ed by the Sharp case wipes out such con- 
sumer choices, and takes away the incentive 
to cut costs in order to cut prices, says Barry 
Lefkowitz, who represents the Burlington 
Coat Factory in Burlington, N.J. 

"Prices will rise and competition will be 
hurt," Mr. Waldman argues. 

[From the Washington Post, Sept. 6, 1988] 

Twisting the Discounters' Arms 

(By Jack Anderson and Joseph Spear) 

When a major piano manufacturer said it 
would no longer stock its pianos in a Hutch- 
inson, Kan., music store, the store owner 
smelled a rat. Brad Davison, of Nelson 
Music, suspected it might have something to 
do with his rock-bottom prices. 

Nelson Music may be a casualty of a 
recent Supreme Court decision that allows 
manufacturers to cancel deliveries to dis- 
count stores whose bargain-basement prices 
are hurting higher-priced retailers. Vertical 
price fixing is illegal under the 1890 Sher- 
man Antitrust Act, but the Supreme Court 
ruling this May makes it tough to enforce it. 

Davison told us the piano maker was 
under pressure from music stores three 
hours away in Kansas City who were com- 
plaining about his low prices. The manufac- 
turer never put it in writing, but Davison 
said the company's officials warned him vo- 
cally to stop selling pianos to customers out- 
side his sales district. 

At one time, the Sherman Antitrust Act 
protected discounters, but the Supreme 
Court opinion written by Justice Antonin 
Scalia changed that. The case that brought 
the issue to a head involved the Sharp elec- 
tronics firm. Scalia wrote that Sharp could 
stop selling calculators to a Houston dis- 
counter in response to complaints from full- 
price retailers. The only thing that Scalia 
said should be illegal was an outright at- 
tempt by a company to set mandatory 
prices. 

But vertical price restraints are rarely 
that blatant. Ask Jim Daskal of the Service 
Station Dealers of America. He said that oil 
companies like to keep a rein on pump 
prices. That usually means service stations 
are expected to sell leaded gas at below 
their cost and unleaded gas at one cent per 
gallon above cost. The stations make their 



profit on premium unleaded, which usually 
goes for 10 to 15 cents per gallon over the 
wholesale price. 

A bill introduced by Sen. Howard M. Metz- 
enbaum (D-Ohio) would stop the subtle 
forms of price restraint. But the chances of 
it passing are dimming as the 100th Con- 
gress winds to a finish. And Sens. Strom 
Thurmond (R-S.C.) and Christopher S. 
(Kit) Bond (R-Mo.) have threatened a fili- 
buster. 

Thurmond and his business allies aren't 
making any friends among the businesses, 
many of them small, that are falling victim 
to the Supreme Court ruling. One of the 
discounters hit, the Burlington Coat Facto- 
ry, recently assembled a list of several more 
casualties. Here are a few: 

Turner Tolson Furniture in New Bern, 
N.C., was cut off by several major suppliers 
without explanation. The 103-year-old busi- 
ness now faces bankruptcy. 

The Northwood General Store in Madi- 
son, Wis., lost its supplier of metal detectors 
because of pressure from competing stores. 

Service Merchandise Catalog of Nashville, 
Term., was threatened with a supply cutoff 
by five appliance and computer makers and 
one toy maker. The company was told it had 
to show price increases if it wanted to get 
the merchandise. That happened shortly 
after the court ruling. 

Discounters aren't the only victims of the 
ruling. Consumers have also kissed many 
bargains goodbye. 

Mr. METZENBAUM. Mr. President, 
these articles document the anticom- 
petitive conduct since the Sharp deci- 
sion. We may not pass this bill because 
there may be an effort on the part of 
some to discuss it at length. Let the 
Members of the Senate and let the 
Members of the Congress decide. Let 
us have a rollcall on whether or not 
we are going to protect those mer- 
chants who keep their prices higher, 
those manufacturers who insist upon 
keeping their prices higher, or wheth- 
er we are going to be willing to stand 
up here on the floor and protect those 
people who need to buy at lower prices 
if they are going to be able to exist in 
this economy. 

Not all people are living in the lap of 
luxury in this country. There are 
many of them who need to save on the 
toys they buy, who need to save on the 
clothing they buy, who need to save 
on electronics they buy, who need to 
save with respect to the appliances 
they buy. 

Why will we not let them do that? 
Why will we not give them an equal 
opportunity? They do not have such 
strong lobbyists around here as some 
others do. 

But the fact is if we can vote this up 
or down, if we can vote it up or down 
and accept the compromise proposal 
of my distinguished colleague who has 
been working with me on this matter, 
my colleague from New Hampshire, I 
think we can pass a fair bill. But if we 
run into a filibuster, then it will be ob- 
vious that there are some who do not 
want people to be able to buy at the 
lowest possible prices available but 
rather are prepared to protect those 






28336 

manufacturers and those merchants 
who want to sell at a higher price. 

Mr. President, I yield the floor. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. BYRD. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



DEPARTMENT OF DEFENSE 
AUTHORIZATION ACT 
Mr. BYRD. Mr. President, I ask that 
the Chair lay before the Senate a mes- 
sage from the House of Representa- 
tives on S. 2749. 

The PRESIDING OFFICER laid 
before the Senate the following mes- 
sage from the House of Representa- 
tives: 

Resolved, That the House insist on its 
amendments to the bill (S. 2749) entitled 
"An Act to authorize appropriations for 
fiscal year 1989 for military activities of the 
Department of Defense, for military con- 
struction, and for defense activities of the 
Department of Energy, to prescribe person- 
nel strengths for such fiscal year for the 
Armed Forces, and for other purposes", and 
ask a conference with the Senate on the dis- 
agreeing votes of the two Houses thereon. 

Ordered, That the following are appointed 
as conferees: 

From the Committee on Armed Services, 
for consideration of the Senate bill, and the 
House amendments, and modifications com- 
mitted to conference: Mr. Aspin, Mr. Del- 
lums, Mr. Montgomery, Mr. Hutto, Mr. 
Skelton, Mr. Leath of Texas, Mr. McCurdy, 
Mr. Foglietta, Mr. Hertel, Mr. Ortiz, Mr. 
Robinson, Mr. Dickinson, Mr. Martin of 
New York, Mrs. Martin of Illinois, Mr. Blaz, 
Mr. Ravenel, and Mr. Weldon. 

For the Committee on Government Oper- 
ations, for consideration of section 921 of 
the Senate bill, and the House amendments, 
and modifications committed to conference: 
Mr. Brooks, Mr. Conyers, Mrs. Collins, Mr. 
Horton, and Mr. Walker. 

From the Committee on Merchant Marine 
and Fisheries, for consideration of section 
921 of the Senate bill, and the House 
amendments, and modifications committed 
to conference: Mr. Jones of North Carolina, 
Mr. Studds, Mr. Hutto, Mr. Davis of Michi- 
gan, and Mr. Young of Alaska. 

From the Committee on Rules, for consid- 
eration of section 921 of the Senate bill, and 
the House amendments, and modifications 
committed to conference: Mr. Pepper, Mr. 
Moakley, Mr. Derrick, Mr. Beilenson, Mr. 
Frost, Mr. Quillen, and Mr. Taylor. 

As additional conferees, for consideration 
of section 921 of the Senate bill, and the 
House amendments, and modifications com- 
mitted to conference: Mr. Foley and Mr. 
Armey. 

Mr. BYRD. Mr. President, on behalf 
of Mr. Nunn and Mr. Warner, I move 
that the Senate disagree to the House 
amendments and agree to the confer- 
ence requested by the House on the 
disagreeing votes of the two Houses 
and that the Chair be authorized to 



appoint the conferees on the part of 
the Senate. 

The motion was agreed to; and the 
Presiding Officer appointed Mr. Nunn, 
Mr. Stennis, Mr. Exon, Mr. Levin, Mr. 
Kennedy, Mr. Bingaman, Mr. Dixon, 
Mr. Glenn, Mr. Gore, Mr. Wirth, Mr. 
Shelby, Mr. Warner, Mr. Thurmond, 
Mr. Humphrey, Mr. Cohen, Mr. 
Quayle, Mr. Wilson, Mr. Gramm, Mr. 
Symms, and Mr. McCain conferees on 
the part of the Senate. 

Mr. BYRD. Mr. President, I ask 
unanimous consent to reconsider en 
bloc the votes that have just occurred. 

Mr. WARNER. I have no objection, 
Mr. President. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The Senator from Virginia. 

Mr. WARNER. Mr. President, I wish 
to thank the distinguished majority 
leader and the Republican leader and 
Members on both sides of the aisle for 
expediting the appointment of confer- 
ees. This conference is now under way 
in S. 407, and I am hopeful that a bill 
can be reported from the conference 
to both bodies for quick action. It is 
badly needed in our national defense. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. BYRD. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 



PARENTAL AND MEDICAL LEAVE 
ACT 



The Senate continued with the con- 
sideration of the bill. 

Mr. BYRD. Mr. President, the 
amendments to the motion to recom- 
mit with instructions and report back 
had included language contained in 
Senator Thurmond's amendment earli- 
er agreed to on child pornography, 
and, through inadvertence, I am told 
that some of the language was left 
out. 

It was my intent, of course, to have 
that amendment included as it was 
when the Senate passed it, as offered 
by Mr. Thurmond. 

I ask unanimous consent that the 
language which was inadvertently 
omitted be included in the committee 
substitute that was reported back. 

The PRESIDING OFFICER. Is 
there objection? Without objection, it 
is so ordered. 

Mr. LEVIN. Mr. President; this pa- 
rental and medical leave legislation 
recognizes the changes that have 
taken place in this Nation's workplace. 
America is no longer a nation of one- 
paycheck families. In fact, the majori- 
ty of U.S. families are now comprised 
of two-earner couples. Yet, all too 



often Congress has failed to recognize 
this change, and has passed legisla- 
tion, such as the Tax Reform Act of 
1986, which unfairly penalizes two- 
wage earner couples. The Parental and 
Medical Leave Act, as modified, re- 
verses this trend. 

I am pleased that this compromise 
version addresses many of the con- 
cerns raised by America's small busi- 
nesses. The Parental and Medical 
Leave Act provides for a limited period 
of unpaid parental leave for the birth, 
adoption, or serious illnesses of a 
child, and medical leave for employees 
who are unable to perform their jobs 
due to a serious illness. It now has two 
major exemptions: it covers only busi- 
nesses with at least 50 employees and 
it covers only employees who have 
been employed for at least 12 months. 
The legislation, as amended, exempts 
95 percent of U.S. employers and 60 
percent of U.S. employees. 

I understand the concern that some 
have expressed that this legislation is 
an open invitation for abuse by em- 
ployees. The modified version has 
greatly reduced the potential for such 
abuse. But there is a fundamental 
check on abuse already built into the 
legislation. Because the leave is 
unpaid, any absence from work will 
result in a reduction in pay. There is, 
therefore, a built-in economic disin- 
centive for abusing the benefit. 

In the long run, I believe this legisla- 
tion will also help America to compete 
in the global marketplace in the 1990's 
and into the 21st century. We have to 
recognize that we cannot meet the 
challenge of foreign competition with- 
out a fundamental change in ap- 
proach. We should try to reduce the 
number of times an employee is forced 
to choose between family responsibil- 
ities and job responsibilities. It is im- 
perative that we find ways to attract 
and keep productive men and women 
in the workforce if America is to suc- 
cessfully compete with foreign busi- 



rjpcc 

This bill is truly pro-family. I sup- 
port Senator Dodd's efforts to craft 
legislation that strikes an appropriate 
balance between the needs of Ameri- 
ca's families, and the ability of busi- 
nesses to meet those needs while re- 
maining sensitve to the special re- 
quirements of small businesses. 

Mr. KENNEDY. Mr. President, I 
hope the Senate will have a chance to 
vote on the parental leave and child 
care measures now before us. It is ob- 
vious that a filibuster is underway in 
earnest. The hypocrisy of the oppo- 
nents is exposed. To avoid the appear- 
ance of obstruction, they acquiesced in 
a meaningless vote to end a meaning- 
less filibuster on Monday, only to 
resume the reality of their obstruction 
with a new filibuster today. 

I hope the Senate can agree on a 
time for a cloture vote as soon as pos- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28337 



sible, so that we will have a fair oppor- 
tunity to end these unseemly delaying 
tactics. 

Opponents are making a serious mis- 
take by waging this filibuster against 
sensible proposals for parental leave 
and child care. The number of working 
parents has grown astronomically in 
recent years, but the availability of pa- 
rental leave and child care has not. 

Too many children across America 
are spending too much time in unat- 
tended, unhealthy, unsafe, and down- 
right dangerous conditions. Working 
parents deserve time off from the job 
when a baby is born or a child is seri- 
ously ill, and they also deserve safe, af- 
fordable child care. What they don't 
deserve is a doubleheader antifamily 
filibuster. 

Mr. PRYOR. Mr. President, I am 
seeking permission to speak for no 
more than 5 minutes, as in morning 
business. 

The PRESIDING OFFICER. With- 
out objection, the Senator from Ar- 
kansas is recognized. 



ELECTORAL COLLEGE REFORM 
Mr. PRYOR. Mr. President, as we 
approach a Presidential election in No- 
vember which promises to be very 
close in the popular vote, it is ironic 
that 1988 marks the 100th anniversary 
of the last selection by the electoral 
college of a minority President. In 
1888, Benjamin Harrison lost in the 
popular vote to Grover Cleveland by a 
margin of 5,439,853 to 5,440,309, but 
won the electoral college vote by a 
margin of 233 to 168. 

The electoral college system has re- 
sulted in the selection of three minori- 
ty Presidents, John Quincy Adams in 
1824, Rutherford B. Hayes in 1876, 
and Harrison, and every election that 
is close in the popular vote presents 
the possibility of a fourth. Before this 
Nation again faces the constitutional 
crisis of the selection of a minority 
President, I think that we should seri- 
ously address the question of electoral 
college reform. 

The electoral college system was 
highly controversial at the Constitu- 
tional Convention of 1787, and it pre- 
sented many problems to the delegates 
chosen to frame our Constitution. The 
major contributing factor to the po- 
tential selection of a minority Presi- 
dent is the fact that electoral votes are 
allocated by the winner-take-all 
method in 49 States and the District 
of Columbia. As a result, the alloca- 
tion of electoral votes does not truly 
reflect the popular vote. 

Four alternatives to the electoral 
college system have been proposed in 
the past. The first alternative is some- 
thing called the district plan, last pro- 
posed in 1983. Electoral votes would be 
allocated by giving two to the winner 
of the statewide popular vote and one 
each to the winner of the popular vote 



in each of the State's congressional 
districts. 

Under the proportional plan, last 
proposed in 1979, electoral votes would 
be proportioned based on the number 
of votes each candidate captured state- 
wide. There is another plan called the 
automatic plan, once again last pro- 
posed in 1979. It would abolish the 
electoral college, Mr. President, elimi- 
nating the problem of the elector who 
does not vote as he or she was pledged 
to vote, and it would automatically al- 
locate electoral votes on a winner-take- 
all basis. 

But the alternative plan, Mr. Presi- 
dent, that has received the most atten- 
tion and congressional action in the 
past is what is known as the direct 
election plan. Under this procedure, 
the electoral college would be elimi- 
nated, it would be abolished, and the 
President and Vice President would be 
elected by a majority of the nation- 
wide popular vote. 

House Resolution 5 and House Joint 
Resolution 12, two versions of the 
direct election plan, are currently 
pending in this historic 100th Con- 
gress. 

Direct election of the President is 
the approach that I have always sup- 
sported. In fact, Joint Resolution 1 in- 
troduced by former Indiana Senator 
Birch Bayh was one of the first bills 
that I cosponsored upon coming to the 
Senate almost 10 years ago. As a Con- 
gressman 10 years earlier in 1969, I 
was a cosponsor of a House resolution 
which would have abolished the elec- 
toral college and provided for direct 
elections of the President. That reso- 
lution in 1969 passed the House of 
Representatives by an overwhelming 
vote of 339 to 70, but it never reached 
the Senate floor. 

Although I have not seen a recent 
poll on this subject, I cannot help but 
believe that direct election of the 
President and the Vice President still 
enjoys the support of a very large ma- 
jority of the American people, and I 
cannot understand the fear of those 
who oppose such a solution to this 
particular predicament. There is cer- 
tainly nothing evil about proposing 
that each person's vote be counted 
equally. That is the way we have been 
taught to conduct elections from the 
time we first voted on our class offi- 
cers in the first grade. 

The electoral college, Mr. President, 
may have made sense before the 
advent of television, daily newspapers, 
radio and instant communication. But 
today now the miracles of modern 
communication enable every American 
citizen in this country to be well in- 
formed about Presidential and Vice 
Presidential candidates and the issues 
that they espouse. 
Direct election of the President will 

give every man and woman in every 

State an equal voice and an equal vote 

in the election of our two national 



highest officials. I think it is time for 
our country, which believes in the 
quality of all citizens, to adopt an elec- 
tion framework which ensures this 
same quality at the voting booth. 

Congress is usually a creature of re- 
action, not of action. We react. We 
very seldom act. I hope that we will 
not have to face the constitutional 
prices of the selection of yet another 
minority President before we act to 
correct this process. This 100th Con- 
gress is, I hope, close to an end. But 
next year, I intend to push for serious 
study and action on this particular 
issue. 

I thank the Chair for recognizing 
me. I yield back the remainder of my 
time. 

Mr. METZENBAUM addressed the 
Chair. 

The PRESIDING OFFICER. The 
Senator from Ohio. 

Mr. METZENBAUM. Mr. President, 
what is the pending order of business? 

The PRESIDING OFFICER. The 
Senate is currently conducting morn- 
ing business and Senators are author- 
ized to speak for not more than 5 min- 
utes. 

Mr. McCAIN addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Arizona. 

(The remarks of Mr. McCain per- 
taining to the introduction of legisla- 
tion appear in today's Record under 
Statements on Introduced Bills and 
Joint Resolutions.) 

Mr. COCHRAN. Mr. President, I 
suggest the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The assistant legislative clerk pro- 
ceeded to call the roll. 

Mr. BYRD. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER (Mr. 
Bingaman). Without objection, it is so 
ordered. 



RETAIL COMPETITION 
ENFORCEMENT ACT 

Mr. BYRD. Mr. President, in accord- 
ance with the order of June 22, and 
having consulted with the distin- 
guished Republican leader, I ask that 
the Chair now lay before the Senate S. 
430. 

The PRESIDING OFFICER. The 
clerk will report. 

The assistant legislative clerk read 
as follows: 

A bill (S. 430) to amend the Sherman Act 
regarding retail competition. 

The Senate resumed consideration 
of the bill. 

Pending: 

Metzenbaum (for Inouye) Amendment No. 
2509, to amend the Newspaper Preservation 
Act (Public Law 91-353), to provide that it 
shall not be unlawful for any person to 
enter into, perform, or enforce a joint oper- 
ating agreement not already in effect, if the 









28338 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



prior written consent of the Attorney Gen- 
eral has been obtained. 

Mr. METZENBAUM. Mr. President, 
is the Senator from Ohio correct in his 
understanding that the pending busi- 
ness is an amendment offered by the 
Senator from Ohio on behalf of Sena- 
tor Inouye and Senator Byrd? 

The PRESIDING OFFICER. The 
Senator is correct. It is pending to the 
committee substitute. 

Mr. METZENBAUM. Mr. President, 
I am informed that the manager of 
the bill on the opposite side desires a 
rollcall in connection with this amend- 
ment. I therefore ask unanimous con- 
sent that this amendment be set aside 
and that the yeas and nays in connec- 
tion with it be ordered at 10 a.m. to- 
morrow. 

Mr. BYRD. Mr. President, I would 
object to ordering the yeas and nays 
by unanimous consent. 

Mr. METZENBAUM. Mr. President, 
I ask for the yeas and nays. 

The PRESIDING OFFICER. Is 
there a sufficient second? There is a 
sufficient second. 

The yeas and nays were ordered. 

Mr. METZENBAUM. Mr. President, 
I ask unanimous consent that that 
rollcall occur at 10 a.m. tomorrow and 
be temporarily set aside. 

Mr. BYRD. Mr. President, I have no 
problem with the Senator asking that 
the amendment be temporarily laid 
aside. Would he not set a time on it be- 
cause the distinguished Republican 
leader and I may have to readjust that 
time later. 

Mr. METZENBAUM. I certainly 
have no objections to that. I under- 
stand the majority leader and minori- 
ty leader control the time of the floor. 
I understood 10 o'clock was satisfac- 
tory. We will just lay aside the rollcall 
to occur at such time as the majority 
and minority leaders agree. 

The PRESIDING OFFICER. With- 
out objection, the amendment will be 
opt usidp 

Mr. RUDMAN addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from New Hampshire. 

AMENDMENT NO. 3037 

(Purpose: To clarify certain provisions re- 
garding the need to show the existence of 
an agreement or conspiracy and the 
amount of evidence that must be present- 
ed in order to avoid summary judgment) 
Mr. RUDMAN. Mr. President, I have 
an amendment at the desk numbered 
3037. 1 ask it now be reported. 

The PRESIDING OFFICER. The 
clerk will report the amendment. 

The assistant legislative clerk read 
as follows: 

The Senator from New Hampshire (Mr. 
Rudman), for himself and Mr. Wilson, pro- 
poses an amendment numbered 3037. 

Mr. RUDMAN. Mr. President, I ask 
unanimous consent that reading of the 
amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 



The amendment is as follows: 
Strike all beginning on page 3, line 10 
through page 4, line 24, and insert in lieu 
thereof the following: 
"Sec 2. Findings. 

"(a) Consumer welfare is greatly en- 
hanced by an ability to purchase goods and 
services at lower prices as a result of vigor- 
ous price competition; 

"(b) vertical price restraints generally 
have an adverse impact on competition that 
results in higher consumer prices; 

"(c) recent court decisions have so narrow- 
ly construed the laws against vertical price 
restraints that consumer welfare has been 
put in jeopardy; and 

"(d) it is necessary to enact legislation 
that protects the interests of consumers in 
vigorous price competition while recognizing 
the needs of manufacturers and others to 
maintain reasonable service, quality, and 
safety standards. 

"Sec 3. The Sherman Act is amended by 
redesignating section 8 and any references 
to section 8 as section 9 and by inserting be- 
tween section 7 and section 9, as herein re- 
designated, the following new section: 

""Sec 8. (a)(1) In any civil action based 
on section 1 or 3 of this Act, including an 
action brought by the United States or by a 
State attorney general, or by the Federal 
Trade Commission under section 5 of the 
Federal Trade Commission Act, which al- 
leges a contract, combination, or conspiracy 
to set, change, or maintain prices, if pursu- 
ant to the Federal Rules of Civil Procedure 
the court finds that there is sufficient evi- 
dence, direct or circumstantial, from which 
a trier of fact could reasonably conclude 
that a person who sells a good or service to 
the claimant for resale entered into a con- 
tract, combination, or conspiracy with a 
competitor of such claimant to curtail or 
eliminate price competition by such claim- 
ant in the resale of such good or service, 
then the court shall permit the trier of fact 
to consider whether such person and such 
competitor engaged in concerted action to 
set, change, or maintain prices for such 
good or service in violation of such section. 
""(2) For purposes of paragraph (1), the 
court shall find the existence of 'sufficient 
evidence' that a person who sells a good or 
service entered into a contract, combination, 
or conspiracy if the claimant presents suffi- 
cient evidence that such person— 

(A) received from a competitor of the 
claimant an express or implied request or 
demand, including a threat to discontinue 
an existing business arrangement, that the 
seller take steps to curtail or eliminate price 
competition by the claimant in the resale of 
such good or service, and 

" "(B) because of such request, demand, or 
threat terminated the claimant as buyer of 
such good or service for resale or refused to 
supply to the claimant some or all of such 
goods or services requested by the claimant: 
Provided, that a termination or refusal to 
supply is made 'because of such request, 
demand, or threat' only if such request, 
demand, or threat is the major contributing 
cause of such termination or refusal to 
supply. 

" "(b) The court shall not permit the trier 
of fact to consider whether such person and 
such competitor engaged in concerted 
action to set, change, or maintain prices for 
such good or service in violation of such sec- 
tion if the court determines that the trier of 
fact could only find that such person and 
such competitor engaged in concerted 
action by making inferences which are im- 
plausible. 



" "(c) In any civil action based on section 1 
or 3 of this Act, including an action brought 
by the Federal Trade Commission under 
section 5 of the Federal Trade Commission 
Act, which alleges a contract, combination, 
or conspiracy to set, change, or maintain 
prices, the fact that the seller of a good or 
service and the purchaser of a good or serv- 
ice entered into an agreement to set, 
change, or maintain the resale price of a 
good or service shall be sufficient to consti- 
tute a violation of such section except that 
this section shall not apply when the agree- 
ment to set, change, or maintain the resale 
price of a good or service is an agreement to 
set, change, or maintain the maximum 
resale price of a good or service. An agree- 
ment between the seller of a good or service 
and the purchaser of a good or service to 
terminate another purchaser as a dealer or 
to refuse to supply such other purchaser be- 
cause of that purchaser's pricing policies 
shall constitute a violation of this section, 
whether or not a specific price or price level 
is agreed upon.". 

"Sec 4. Nothing in this Act shall be con- 
strued to change the requirement of the 
Sherman Act that a violation of section 1 or 
3 of that Act may only be found upon a de- 
termination that the defendant entered into 
an illegal contract, combination, or conspir- 
acy. 

"Sec 5. Nothing in this Act shall affect 
the application of the rule of reason stand- 
ard to vertical location clauses or vertical 
territorial restraints under the antitrust 
law.". 

Mr. RUDMAN. Mr. President, let me 
proceed just for a few moments to 
spread across the record the nature of 
this amendment, which is a compro- 
mise amendment that we who are in 
favor of this legislation believe solves 
the major antitrust problems the op- 
ponents of this bill have raised, and 
they have been valid objections. 

I offer this amendment along with 
Senator Wilson. 

The substitute amendment addresses 
both parts of the committee bill. First, 
it clarifies the original purpose of sec- 
tion (a)— to fill the gap left by the Su- 
preme Court's decision in the Monsan- 
to case. As in the committee report, 
the substitute still specifies what evi- 
dence, if presented, would be sufficient 
to send the case to the trier of fact. It 
explicity states that the Court must 
determine, in accordance with the 
Federal Rules of Civil Procedure, that 
there is sufficient evidence, direct or 
circumstantial, of a contract, combina- 
tion, or conspiracy. The bill then clari- 
fies that the evidence outlined in sub- 
paragraphs (B) (i) and (ii) normally 
constitutes evidence of collusion suffi- 
cient to meet the standards of the bill. 
The description of the evidence out- 
lined in subparagraphs (B) (i) and (ii) 
has been slightly changed. The word 
"suggestion" has been deleted due to a 
concern about the meaning of an "im- 
plied suggestion." Under the amend- 
ment, it is still the case that the plain- 
tiff must show an "express or implied" 
"request," "demand," or "threat." The 
plaintiff need not show specific use of 
the words "request," "demand," or 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28339 



"threat" in the communication be- 
tween the manufacturer and the 
claimant's competitor. Such a require- 
ment would create an impossible 
burden and frustrate the purposes of 
the bill. Instead, the plaintiff must 
show, as under the committee compro- 
mise, that the communication, in es- 
sence, constitutes a "request," 
"demand," or "threat." 

The definition of the causation re- 
quirement in subparagraph (BXii) has 
also been changed. The purpose of 
this modification is to respond to con- 
cerns raised by several of our col- 
leagues which, I believe, are primarily 
due to ambiguous language in the 
committee's report. The amendment 
we are offering would change the cau- 
sation requirement from "a major con- 
tributing cause" to "the major contrib- 
uting cause." The purpose of this 
change is to make clear that the com- 
munication described in subparagraph 
(BXi) must not only be a significant 
reason, but also the major contribut- 
ing cause for the termination or refus- 
al to supply. 

The addition of section 8(a)(2) em- 
phasizes the fact that the Court con- 
tinues to have the role of applying the 
standards of the amendment in ac- 
cordance with the Federal Rules of 
Civil Procedure and the purposes of 
this legislation. It clarifies that if a 
reasonable person could only find the 
existence of a conspiracy by making 
implausible inferences, then the case 
should not go to the trier of fact. 

This standard is consistent with cur- 
rent procedural interpretations of the 
Federal Rules of Civil Procedure. Ver- 
tical price fixing cases frequently rely 
on circumstantial proof and inferences 
therefrom. Section 8(a)(2) does not 
mean that a case relying on such proof 
or inferences should be dismissed, 
unless the drawing of implausible in- 
ferences is the only way a trier of fact 
could find a conspiracy. 

Second, the substitute amendment 
addresses section 8(b) of the commit- 
tee compromise as well. As amended, 
section 8(b) would incorporate the pre- 
viously accepted amendment exempt- 
ing maximum vertical price fixing 
from the reach of the bill. Further- 
more, it would deal with the recent 
Supreme Court decision in the Sharp 
case. In that case, the Supreme Court 
held that a termination of a retailer 
because of such retailer's pricing poli- 
cies, that is discounting, was not a 
"price related" termination unless the 
parties to the agreement agreed to set 
or maintain prices at a specific price or 
price level. 

I might add parenthetically, having 
read that decision thoroughly, that it 
is what you might call very strict or, if 
you would prefer, narrow construc- 
tion. 

This decision defies common sense. 
After the Sharp case, it is doubtful 
that there will continue to be any ver- 



tical price fixing cases brought be- 
cause no manufacturer or retailer will 
be dumb enough to state expressly 
what is clearly implied by the termina- 
tion. 

Finally, section 4 of the substitute 
makes clear that a violation of section 
1 or 3 of the Sherman Act requires the 
finding of an illegal contract, combina- 
tion, or conspiracy. Section 5 of the 
substitute amendment incorporates a 
clarifying amendment which makes 
clear that the bill does not affect ap- 
plication of the rule of reason stand- 
ard to vertical location clauses or verti- 
cal territorial restraints. 

This is a commonsense amendment 
that consumers everywhere deserve. 
The changes made by this amendment 
should make the bill acceptable to any 
Senator who is concerned about bal- 
ancing the interests of the consumers 
in his or her State against the very le- 
gitimate concern of not opening up 
the floodgates of litigation. 

Mr. President, for those who will 
read this Record amongst the anti- 
trust bar who have been in the fore- 
front in many cases of the opposition 
to this bill, I want just to read some- 
thing to the body that will be in the 
Record which ought to give some 
sense of relief to those who have not 
read this bill, and have only heard 
about it. 

I want to in about 1 minute elicit 
some very interesting facts. Let me 
present them this way: 

In order to survive a motion for sum- 
mary judgment in a retail price main- 
tenance case, the plaintiff must have 
presented the following. I am going to 
lay out the burden of proof on the 
plaintiff which I think if it is under- 
stood ought to allay some of the fears 
of those who do not understand the 
compromise. Here are five elements 
that the plaintiff must have present- 
ed. 

First, evidence that a competitor 
made a price complaint to the plain- 
tiff's superior; second, evidence that 
the complaint was accompanied by a 
request that the supplier curtail or 
eliminate the pricing policy of the 
plaintiff; third, evidence that the 
plaintiff was terminated because of 
the complaint; fourth, evidence that 
the major contributing cause of the 
termination was price complaint; and, 
after all of those have been proven by 
the plaintiff to the satisfaction of the 
trier of fact; and fifth, evidence that 
directly indicates a conspiracy existed 
between the supplier and the competi- 
tor or evidence from which a plausible 
inference can be drawn that such a 
conspiracy existed. 

For anyone who has tried any com- 
plex litigation, I will tell you from my 
own experience that is a very heavy 
burden to carry. Yet, it is the compro- 
mise which we have reached here to 
assure those who have been concerned 



that this bill would open a "floodgate" 
of litigation. 

So I hope, as this debate ripens on 
this legislation, people will keep in 
mind those five points. I intend to 
keep them in mind. If people want to 
make irresponsible references to this 
legislation as to what burden it im- 
poses on defendants, I would like them 
to keep in mind the rather heavy 
burden of proof that is now imposed 
under this legislation on the plaintiff. 
Mr. METZENBAUM addressed the 
Chair. 

The PRESIDING OFFICER. The 
Senator from Ohio. 

Mr. METZENBAUM. Mr. President, 
I appreciate the effort and coopera- 
tion that has been extended by the 
Senator from New Hampshire. I 
always enjoy working with him. He 
brings to the legislative process an as- 
tuteness and willingness to dig into 
the legislation word by word, and 
working with him on S. 430 is no ex- 
ception to the usual rule. 

While I was satisfied with the bill 
the way that it was, I appreciate the 
help of my colleague to clarify the bill 
and, therefore, Mr. President, I am 
prepared to accept the amendment. 

The PRESIDING OFFICER. Is 
there further debate? 
Mr. COCHRAN addressed the Chair. 
Mr. RUDMAN. Mr. President, who 
has the floor? 

The PRESIDING OFFICER. The 
Senator from New Hampshire has the 
floor. 

Mr. METZENBAUM. I thought the 
Senator from Ohio had the floor. 

The PRESIDING OFFICER. If the 
Senator from Ohio has not completed 
speaking, he has the floor. 

Mr. METZENBAUM. Mr. President, 
I just indicated I was prepared to 
accept the amendment. 

The PRESIDING OFFICER. Is 

there further debate? 

Mr. COCHRAN addressed the Chair. 

The PRESIDING OFFICER. The 

Senator from Mississippi wishes to 

debate the bill. 

Mr. COCHRAN. Mr. President, it is 
my understanding that the matter 
before the Senate is the amendment 
offered by the Senator from New 
Hampshire, Mr. Rudman. It was my 
understanding that Senator Thur- 
mond had a statement he wished to 
make in rebuttal to the argument of 
the Senator from New Hampshire. 
Since he was engaged in conversation 
with the Senator from New Hamp- 
shire, I did not think he realized that 
the Chair was about to put the ques- 
tion on the amendment before he had 
a chance to make his statement. My 
rising at this point is simply to permit 
him to speak in opposition to the 
amendment if that is his intention. 
Mr. RUDMAN. If the Senator will 

yield 

Mr. COCHRAN. I am happy to yield. 





28340 

Mr. RUDMAN [continuing]. For the 
purpose of a comment, obviously the 
distinguished chairman of the Judici- 
ary Committee opposes this legisla- 
tion. I assume he will continue his op- 
position to it. If I might, with the in- 
dulgence of my friend from Mississip- 
pi, I actually had one more sentence to 
add to my statement before the Sena- 
tor from Ohio sought the floor. If I 
might just finish that statement, then 
I will yield the floor. 

Mr. COCHRAN. I am happy to yield 
the floor for that purpose, Mr. Presi- 
dent, on condition that my right to re- 
claim the floor will not be jeopardized 
in any way by yielding. 

The PRESIDING OFFICER. Is 
there objection? Without objection, 
the Senator from New Hampshire. 

Mr. RUDMAN. Mr. President, I just 
wanted to conclude by simply stating 
that, if the amendment that is pend- 
ing is adopted, the only real objection 
it seems to me is left to S. 430, as 
amended, would be the codification of 
the so-called per se rule for resale 
price maintenance. 

That rule I would point out to my 
colleagues has been with us for about 
75 years and it served the country very 
well. 

I would hope that in evaluating how 
they will vote on this amendment 
people might look very carefully at 
how we have carefully drawn the 
amendment and keep in mind that we 
are codifying a rule that has been in 
existence in this body and in the law 
for three-quarters of a century. 
I yield the floor. 

The PRESIDING OFFICER. The 
Senator from Mississippi is recognized. 
Mr. COCHRAN. Mr. President, I 
thank the Chair and appreciate the 
courtesy of the distinguished Senator 
from New Hampshire. 

I am prepared to yield the floor to 
the distinguished Senator from South 
Carolina for his response to the argu- 
ments of the Senator from New Hamp- 
shire. 

I participated in the debate on this 
bill earlier when it was on the floor, 
expressed my opposition to the legisla- 
tion, and read into the Record a 
number of comments and concerns ex- 
pressed to me by small businesses in 
my State of Mississippi who felt a very 
serious problem would be created for 
many small industries if the legisla- 
tion were enacted as previously pre- 
sented to the Senate. 

I am glad the Senator from South 
Carolina is prepared to discuss the 
amendment of the Senator from New 
Hampshire, because it does provide 
some new language. I am not certain 
at this point, however, whether it 
changes the thrust of the bill suffi- 
ciently for Senators who previously 
opposed it to change their minds. 

I am anxious to hear what the dis- 
tinguished Senator from South Caroli- 
na has to say about the amendment. 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



I yield the floor at this point. 
The PRESIDING OFFICER. The 
Senator from South Carolina is recog- 
nized. 

Mr. THURMOND. Mr. President, I 
rise in strong opposition to the substi- 
tute amendment introduced by Sena- 
tors Rudman and Wilson. Senator 
Rudman has described this amend- 
ment as common sense and one that 
"should make the bill acceptable to 
any Senator who is concerned about 
balancing the interest of the consum- 
ers in his or her State against the very 
legitimate concern of not opening up 
the floodgates of litigation." 

With all due respect to the Senator 
from New Hampshire, I am certain 
that each of ray colleagues has a 
strong interest in the consumers of his 
or her State and the Nation as a 
whole. I am tired of the allegation 
that I, and other Senators who oppose 
this legislation, are anticonsumer. 
This is untrue. This bill should be seen 
for what it is— special interest legisla- 
tion for those who want a statutory 
mandate to pursue groundless litiga- 
tion against manufacturers at great 
expense to the manufacturers and ul- 
timately the consumer. 

There is nothing in S. 430 that guar- 
antees low prices for the consumer. 
This bill is about the level of proof 
necessary to prove a price fixing con- 
spiracy. Obviously, the lower the level 
of proof, the easier it is to threaten ex- 
pensive and time consuming litigation. 
The amendment is also described by 
Senator Rudman as a further clarifica- 
tion of the bill that was reported out 
of the Judiciary Committee last 
winter. In my view, the amendment 
does not clarify, but only highlights 
the difficulties of this legislation. Al- 
though the amendment provides that 
there must be an "agreement" in order 
to prove a violation of section 1 and 3 
of the Sherman Act, the bill still 
allows a jury to find an agreement 
based on facts which are ambiguous as 
to whether an agreement exists. Nor 
does the inclusion of a section preclud- 
ing a jury from making implausible in- 
ferences correct the problems of the 
bill. Under the terms of the bill, the 
existence of an agreement to set prices 
can be plausibly inferred from a com- 
plaint followed by termination. 

The most troublesome aspect of this 
amendment, however, is the inclusion 
of language in section 3, subsection 
8(c), overruling the Supreme Court's 
decision in the Sharp Electronics case. 
I remind the Senate again that this 
amendment would overrule the Su- 
preme Court's decision in the Sharp 
Electronics case. That decision was 
only issued last May and has never 
been the subject of hearings before 
the Judiciary Committee and was 
never considered by the committee in 
fashioning what is presently S. 430. In 
the Sharp case, the Supreme Court 
was asked to decide whether an agree- 



ment between a manufacturer and one 
of its retailers to terminate another re- 
tailer because of its pricing practices 
was per se illegal because it was an 
agreement to set resale prices. The 
Court held that it was not, because 
there was no agreement "on price or 
price levels." In other words, the 
Court held that this agreement was to 
be treated as a vertical non-price 
agreement, subject to the rule of 
reason analysis. 

It is worth noting that the propo- 
nents of the amendment claim that 
the Court held that there must be an 
agreement on a specific price or price 
level, but that is clearly not the case. 
In fact, the court of appeals, whose 
judgment was affirmed by the Su- 
preme Court, specifically held other- 
wise, stating that the dealer "must ex- 
pressly or impliedly agree to set its 
prices at some level, though not a spe- 
cific one." 

As the ranking member of the Anti- 
trust Subcommittee and the Judiciary 
Committee, I am especially concerned 
that legislation as far reaching as this 
not be enacted without the considered 
views of various antitrust experts. The 
Sherman Act will have its centennial 
anniversary in 1990. It would be a 
tragedy indeed, if, at the same time, 
because of unwarranted anticonsumer 
rhetoric, and I repeat— anticonsumer 
rhetoric— we were to enact legislation 
that was anticompetitive rather than 
procompetitive. 

Mr. President, apart from these ob- 
jections to the amendment, I continue 
to oppose that part of the amendment 
that is unchanged from S. 430 as re- 
ported by the Judiciary Committee. 
Although I have spoken several times 
about this bill and my opposition to it, 
I wish to highlight some of the points 
I have previously made. S. 430 reverses 
the Supreme Court's 1984 holding in 
Monsanto versus Spray-Rite Service 
Corp. and codifies the per se illegality 
standard for vertical price fixing. Mr. 
President, I want to repeat that sen- 
tence: This bill, S. 430, reverses an- 
other Supreme Court decision, and 
that is the 1984 holding in Monsanto 
versus Spray-Rite Service Corp., and 
codifies the per se illegality standard 
for vertical price fixing. I am opposed 
to S. 430 because the Monsanto deci- 
sion should not be reversed and does 
not need clarification. The evidentiary 
standard which that decision estab- 
lished carefully balances the Colgate 
principle of unilateral conduct against 
the use of circumstantial evidence to 
prove a conspiracy to fix resale prices. 
In my view, if we allow the existence 
of price complaints to be the only 
basis for a finding of a conspiracy, 
even if the dealer termination is in re- 
sponse to the complaints, we tip the 
scale against Colgate, and erode a 
principle that has been one of the 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28341 



main foundations of antitrust law for 
many years. 

In addition, S. 430 is not necessary 
to protect discount operations in this 
country. Recent statistics indicate that 
there are some 67 publicly traded dis- 
count companies, including K-Mart, 
Wal-Mart, Federated Department 
Stores, and Burlington Coat. From 
1985 to 1986, discount store openings 
increased by 2.3 percent, and sales in- 
creased by 6.3 percent. According to 
Discount Merchandiser, in terms of 
dollar volume, discount stores are the 
largest retailers of housewares and 
gifts, infants' wear, domestics, toys, 
small electrics, stationery and greeting 
cards. 

Finally, although I believe that ver- 
tical price fixing should be per se ille- 
gal, I am opposed to codifying the per 
se standard and forever barring judi- 
cial review of this issue. It has been 
argued that resale price maintenance, 
in some circumstances, may promote 
interbrand competition. It may enable 
a manufacturer to create attractive 
and inviting stores and showrooms. It 
may enable dealers to train sales per- 
sonnel to provide technical advice and 
assistance to customers regarding com- 
plex or new products. Resale price 
maintenance may also deter some 
dealers from taking a "free ride" on 
other dealers' sales efforts. In view of 
this debate, this hardly seems the time 
to be locking in the rule against a 
resale price maintenance. The courts 
should not be hamstrung this way. 

In discussing this issue, it should be 
remembered that the Monsanto deci- 
sion was not reached just by a majori- 
ty of conservatives on the Supreme 
Court. With the exception of Justice 
White, who did not participate in the 
decision, Monsanto was decided by a 
unanimous Court. I would strongly 
urge all my colleagues to vote against 
S. 430, to allow the Monsanto decision 
to remain undisturbed, and to allow 
the courts, as they have always done, 
to fashion a per se standard where ap- 
propriate. 

This legislation is opposed by a wide 
array of antitrust experts, and by the 
American Bar Association, the New 
York City Bar Association Antitrust 
Committee, as well as the Justice De- 
partment and the Federal Trade Com- 
mission. This legislation is also op- 
posed by literally dozens of business 
trade associations and companies, in- 
cluding the U.S. Chamber of Com- 
merce, the Business Roundtable, the 
National Association of Manufactur- 
ers, the American Textile Manufactur- 
ers Institute, and the American Paper 
Institute. 

The major event spawning the cre- 
ation of S. 430 was the Supreme 
Court's 1984 decision in Monsanto 
versus Spray-Rite Service Corp. In 
that decision, the Supreme Court held 

that a conspiracy to set vertical prices, 

in violation of section 1 of the Sher- 



man Act, is not established by proof 
that a manufacturer terminated a dis- 
tributor following, or even in response 
to, price complaints by other dealers. 
The Court held that "Cslomething 
more than evidence of complaints is 
needed. There must be evidence which 
tends to exclude the possibility that 
the manufacturer and nonterminated 
distributors were acting independent- 
ly." The Court stressed that, "it is of 
considerable importance that inde- 
pendent action by the manufacturer, 
and concerted action on nonprice re- 
strictions, be distinguished from price- 
fixing agreements since under present 
law the latter are subject to per se 
treatment and treble damages." Mr. 
President, I want to repeat this last 
statement because it is critical in un- 
derstanding why S. 430 is wrong: "it is 
of considerable importance that inde- 
pendent action by the manufacturer, 
and concerted action on nonprice re- 
strictions, be distinguished from price- 
fixing agreements since under present 
law the latter are subject to per se 
treatment and treble damages." 

The proponents of S. 430 claim that 
this language is ambiguous and has 
engendered considerable confusion in 
the lower courts concerning the appli- 
cation of evidentiary standards in ver- 
tical price-fixing cases. I do not agree. 
In my view, Monsanto clearly articu- 
lates the appropriate evidentiary 
standard applicable to dealer termina- 
tion cases. If there is confusion among 
lower court decisions, or if the lower 
courts are applying incorrect stand- 
ards, the more appropriate way to cor- 
rect the situation is through the judi- 
cial process, and not through legisla- 
tion like S. 430, which is itself ambigu- 
ous and confusing. 

Some have argued that the eviden- 
tiary standard established by Monsan- 
to is so difficult for a plaintiff to meet 
that it is virtually impossible for a 
dealer termination case to reach the 
jury. Such an argument simply has no 
validity. In Monsanto itself, the Court 
found more than enough evidence to 
support the existence of price-fixing 
agreements and termination by the 
plaintiff, Spray-Rite, pursuant to the 
agreements. 

The Court found that there was 
direct evidence of resale price mainte- 
nance agreements from testimony by a 
Monsanto district manager that on at 
least two occasions after Spray-Rite 
was terminated, Monsanto advised 
price-cutting distributors that they 
would not receive adequate supplies if 
they did not maintain the suggested 
resale prices. After one of the distribu- 
tors still did not comply, its parent 
company was informed of the situa- 
tion and the parent instructed its sub- 
sidiary to conform to the resale price. 
There was also a distributor newslet- 
ter, which the Court described as a 
"more ambiguous example," which 
stated that "every effort will be made 



to maintain a minimum market price 
level." 

Mr. COCHRAN. Mr. President, 
S. 430 is being touted as proconsumer 
legislation. In reality, nothing in this 
bill guarantees low prices for the con- 
sumer. What the bill would do is to 
lower the level of proof that is neces- 
sary to prove a price-fixing conspiracy 
and to codify the per se rule for verti- 
cal price fixing. 

Obviously, the lower the level of 
proof, the easier it is to threaten ex- 
pensive and time-consuming litigation. 

In effect, this bill would condemn 
virtually all distribution agreements 
that merely affect price competition, 
even if they make no reference to 
resale price maintenance. Often, distri- 
bution agreements, even those that 
"affect" price competition, benefit 
consumers. The courts usually recog- 
nize this economic reality and, with 
reasonable success, have been able to 
distinguish between those agreements 
which benefit competition and those 
which are harmful. 

Assistant Attorney General Charles 
Rule, in a February 5, 1988, Wall 
Street Journal article, pointed to an 
actual case that illustrates this point: 

Mack Trucks, Inc., an American maker, al- 
lowed its distributors to participate in a 
"sales assistance program" that lowered the 
effective wholesale prices charged to dealers 
having a hard time competing against other 
manufacturers. Mack wanted its dealers to 
discount the trucks, so it made them avail- 
able at the normal price and rebated 
enough money to guarantee the dealer a 
margin on a reduced sticker price. Mack 
would deny the rebate. 

When one of Mack's dealers challenged 
the program, claiming that it was a form of 
resale price maintenance, a federal court of 
appeals held the practice perfectly legal. 
Other courts have sensibly upheld similar 
agreements. But, because the scheme in the 
Mack example "affects" price competition— 
that is, cuts the price the distributor would 
otherwise charge— the agreement would be 
illegal under the pending legislation. Yet 
the sponsors maintain their bills are pro- 
consumer. 

Vertical restraints usually serve pro- 
competitive purposes, such as facilitat- 
ing services to consumers. Such agree- 
ments should not be prohibited, but 
should be judged on a case by case 
basis in order to distinguish between 
illegal price-fixing and legitimate 
price-setting. 

Small manufacturers and retailers 
would be hurt by this bill. The bill 
would especially hurt small, high-tech- 
nology companies which use innova- 
tive, service-oriented distribution ef- 
forts in order to establish their mar- 
kets. 

Without the ability to negotiate the 
type of distribution agreements that 
this bill would ban, many of these 
small firms may be unable to market 
their products effectively. 

Peavy Electronics Corp. is an elec- 
tronics firm located in Meridian, MS, 












28342 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



which has worked 23 years to establish 
itself as a leader in the industry. The 
company manufactures speakers, am- 
plifyers, and other highly-sophisticat- 
ed electronic products which are dis- 
tributed throughout the United States 
and in 102 foreign countries. This 
firm, which employs approximately 
1,500 Mississippians in eight plants in 
my State, attempts to insure the satis- 
faction of its customers through se- 
lecting particular dealers and training 
those dealers on how to sell, service 
and install their equipment. Customer 
service is vital to this company's sur- 
vival. 

If S. 430 were enacted, it would se- 
verely inhibit Peavy Electronics' abili- 
ty to deal with local retailers that it 
trains to service its products. Many 
discount and mail order dealers offer 
no service whatsoever. 

In a letter to me opposing S. 430, the 
company's owner states: 

In all honesty, it completely blows my 
mind how Congress can take the commodity 
approach to everything that is sold in the 
U.S.A. This illustrates to me that perhaps 
the Congress is out of touch with the reality 
of many of today's high-tech products • * *. 
In today's marketplace, customers are just 
as important as they were in previous years. 
If Congress disallows the ability of oper- 
ations like Peavy Electronics to select cer- 
tain dealers and to deal through these deal- 
ers, then I fear that the future of our com- 
pany is in dire jeopardy and, along with 
that, the entire economy of the U.S.A. 

Mr. President, it concerns, me that 
we are being asked to consider this leg- 
islation in the name of consumer pro- 
tection and consumer rights when, as 
my constituent correctly contends, 
these are the very values endangered 
by this legislation. Consumers could be 
denied the service that is just as im- 
portant to them as price or product se- 
lection. 

I hope the Senate will carefully 
review the provisions contained in this 
bill and weigh them against the reali- 
ties of the modern marketplace. 

I thank the distinguished Senator 
from South Carolina for yielding me 
this time. 

Mr. FORD. Mr. President, I have 
joined as a cosponsor of S. 430 because 
I believe it addresses serious inequities 
which currently exist in the litigation 
of vertical price-fixing cases. The Sen- 
ator from Ohio and others have 
worked diligently to fashion a piece of 
legislation which corrects many of 
these inequities and amends our anti- 
trust laws to work as I believe they 
were initially intended. 

However, Mr. President, I have re- 
cently been made aware of the con- 
cerns of a number of business groups 
in my State and elsewhere regarding 
the impact of this legislation on rou- 
tine manufacturer/dealer relation- 
ships. I do not believe these fears are 
well-founded. However, in order to al- 
leviate some of these concerns, I would 



like to engage my friend from Ohio in 
a brief colloquy. 

My principal concern is that the bill 
as drafted might possibly be construed 
or misread as obscuring the distinction 
between vertical price restraints, 
which are per se illegal, and bona fide 
vertical territorial restraints which 
since the 1977 Supreme Court ruling 
in Continental TV versus GTE Sylva- 
nia, have been subject to a "rule of 
reason" analysis common to antitrust 
law. 

May I ask the distinguished Senator 
from Ohio, was it the intent of the Ju- 
diciary Committee to modify the Syl- 
vania Supreme Court ruling or any of 
the precedents that have evolved from 
that case, in any way that would alter 
the current legal treatment of vertical 
territorial restraints? 

Mr. METZENBAUM. Let me assure 
my friend from Kentucky that there 
was absolutely no intent to change or 
amend application of the Sylvania Su- 
preme Court decision to vertical terri- 
torial restraints not involving a price 
restraint. In fact, the Judiciary Com- 
mittee report states quite clearly that 
"S. 430 does not apply to nonprice ver- 
tical restraints. Sylvania still governs 
the legality of nonprice vertical re- 
straints." 

The amendment I am offering clari- 
fies that the bill does not address bona 
fide vertical location clauses or bona 
fide vertical territorial restraints. 

Mr. FORD. I appreciate that clarifi- 
cation by my friend from Ohio. Let me 
ask him further, suppose that we have 
a wholesaler that has a bona fide ex- 
clusive territory contract with his or 
her supplier. There are clear benefits 
to such a contract. For example, it 
would require the wholesaler to serv- 
ice all accounts, including the unprof- 
itable ones. And suppose that an ad- 
joining wholesaler using the same sup- 
plier decides to ignore the exclusive 
territory arrangement and move into 
the first wholesaler's market and pick 
off some of the biggest, most profita- 
ble customers. This second wholesaler, 
I am told, is commonly referred to as a 
"transshipper." The only way such 
transshippers can succeed is by offer- 
ing a lower price than the invaded 
wholesaler, either on a temporary or 
longer term basis. The transshipper 
often can afford to do this, since he or 
she may not be burdened with the re- 
quirements of an exclusive territory 
contract to service all retailers in the 
marketing area— large and small, prof- 
itable and unprofitable. 

If the first wholesaler writes to or 
calls the supplier and complains about 
the transshipper for invading his or 
her territory, my understanding of 
current law is that the courts would 
consider this a Sylvania type case in- 
volving a vertical geographic territori- 
al restraints and, therefore, subject to 
a rule of reason analysis, even though 
there is a specific price element in- 



volved. The reasoning would be that 
the price aspect is incidental to any 
subsequent termination that might 
follow for the violation of another 
wholesaler's exclusive territory. 

If S. 430 is enacted in its current 
form, would the distinguished Senator 
agree that the courts should approach 
the case in exactly the same manner 
as under current law? 

Mr. METZENBAUM. Provided that 
there was nothing more to the factual 
situation than what the Senator has 
just described, I would agree that the 
courts should approach the case in ex- 
actly the same manner as under cur- 
rent law. If the court currently would 
apply the Sylvania case, it would do 
the same after enactment of this bill. 
Mr. FORD. So the factual situation 
that I have just described would be 
treated exactly as under current law if 
S. 430 is enacted. Many are fearful 
that valid exclusive territory arrange- 
ments would be deemed to restrict 
competition and thereby affect price 
competition, requiring courts to char- 
acterize and treat such practices as 
price constraints subject to per se con- 
demnation under the provisions of S. 
430. Is it the intent of the committee 
and the view of the Senator from Ohio 
that current legal standards used to 
judge the legality of vertical geograph- 
ic territorial restraints will be unaf- 
fected by S. 430, so that a dealer ter- 
mination case for violation of an ex- 
clusive territory arrangement without 
a price restraint component would 
continue to be subject to the Sylvania 
Supreme Court analysis? 

Mr. METZENBAUM. That is correct 
with respect to the geographic territo- 
rial restraint you described. 

Mr. FORD. I thank the distin- 
guished Senator for the clarification 
with respect to the amendment he is 
offering on this issue. 

On a more general level, would the 
bill change current legal standards ap- 
plicable when there is an agreement to 
cut off a discounter because of its pric- 
ing practice, even if the termination 
leaves only one distributor in an area? 
Mr. METZENBAUM. Yes, the bill 
would change current legal standards 
on this point only because of the Su- 
preme Court's recent decision in the 
Sharp case. The agreement you de- 
scribe would be per se illegal under 
section 8(b) of this bill. 

The intent of S. 430 has not changed 
from its original introduction al- 
though the state of the law articulated 
by the Supreme Court changed on 
May 2, 1988. At that time, the Su- 
preme Court, in Business Electronics 
Corp. versus Sharp Electronics Corp., 
found that an agreement between a 
manufacturer and a high-price retailer 
to cut off a discounter because it is 
price cutting is not per se illegal. In- 
stead, the Court analyzed the agree- 
ment as a nonprice vertical restraint 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28343 



subject to the "rule of reason" stand- 
ard. 

The Supreme Court had not decided 
the Sharp case when the Judiciary 
Committee reported S. 430 and the 
committee report should be interpret- 
ed in light of the law articulated by 
the Supreme Court at the time the 
report was written. At that time, "non- 
price vertical restraints" was not un- 
derstood to mean an agreement to 
eliminate a distributor because of the 
distributor's pricing practice. The re- 
port's reference to "nonprice vertical 
restraints," therefore, does not include 
agreements such as the one in Sharp 
which the Supreme Court only subse- 
quently determined to be a nonprice 
vertical restraint. 

In those cases, proof of an agree- 
ment on price or price level is not nec- 
essary to find a per se violation of the 
antitrust laws. As the Senate report 
states, 

The phrase "price level," and similar 
terms, have almost become terms of art re- 
ferring to a restrictive definition of vertical 
price fixing. The requirement of an agree- 
ment on a "price level" or on a specific price 
has never been the law. Such a requirement 
would make little sense, for example, when 
the vertical price-fixing conspiracy puts a 
distributor out of business because of its 
pricing practice. 

The committee report also addresses 
the question of whether a per se viola- 
tion must include an agreement be- 
tween the supplier and higher-price 
distributor regarding the higher-price 
distributor's prices. It states that the 
bill as originally introduced— 
might have been interpreted to mean a ver- 
tical price-fixing conspiracy must involve an 
agreement between a supplier and a reseller 
related to that reseller's pricing of a good or 
service. This is certainly one of the tradi- 
tional formulations of a vertical price-fixing 
conspiracy. It is not, however, an inclusive 
definition of vertical price fixing. * * * The 
amended language makes it clear that all 
forms of vertical price fixing are illegal per 
se. 

These principles, expressed as the 
view of the majority of the Judiciary 
Committee, need to be restated, par- 
ticularly after the Supreme Court's 
decision in the Sharp case. Passage of 
S. 340 before the Supreme Court's 
consideration of the Sharp case would 
have compelled a different result. 

Mr. FORD. I agree that passage of 
S. 430 would mean that an agreement 
to stop doing business with a distribu- 
tor because of its pricing practices 
would be analyzed as a vertical price 
restraint under section 8(b). 

What about a case where a distribu- 
tor is forced to agree to conditions 
that might conceivably be subterfuges 
for agreements to eliminate price cut- 
ting, such as the imposition of condi- 
tions not related to price that effec- 
tively destroy its ability to compete? 
For example, I understand that some 
retailers are being prohibited from 
taking orders by telephone or the 



mail, or from selling to persons not 
physically present in their showroom. 

Mr. METZENBAUM. In all cases in- 
volving application of the per se rule, 
the factfinder must find that the dis- 
tributor is cut off because of its pric- 
ing policies. Such a finding could be 
made in the circumstance you de- 
scribe. 

Mr. FORD. I thank the distin- 
guished Senator. I would only add 
that I hope that this legislative intent 
and history would be preserved in con- 
fcrcncc 

Mr. METZENBAUM. I intend to 
keep the legislative history intact 
through conference. 

AMENDMENT NO. 34 14 

(Purpose: To regulate interstate commerce 
by providing for uniform standards of li- 
ability for harm arising out of general 
aviation accidents) 

Mrs. KASSEBAUM. Mr. President, I 
sent to the desk an amendment in the 
second degree and ask for its immedi- 
ate consideration. 

The PRESIDING OFFICER. The 

clerk will report. 

The legislative clerk read as follows: 

The Senator from Kansas [Mrs. Kasse- 

baum] proposes an amendment numbered 

3414 to amendment numbered 3037. 

Mrs. KASSEBAUM. Mr. President, I 
ask unanimous consent that reading of 
the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 
The amendment is as follows: 
At the end of Amendment No. 3037, add 
the following new section, and renumber ac- 
cordingly: 

That this Act may be cited as the "Gener- 
al Aviation Accident Liability Standards Act 
of 1987." 

FINDINGS AND PURPOSE 

Sec 2. (a) The Congress finds that— 

(1) transportation by air of passengers 
continues to comprise an increasingly im- 
portant component of the nation's overall 
transportation system; 

(2) although the incidence of injuries to 
passengers in general aviation accidents has 
decreased, the number of general aviation 
accident liability claims againt general avia- 
tion aircraft manufacturers and the amount 
of damages sought in such claims is increas- 
ing at disproportionate rates, beyond any re- 
lationship to the quality of the aircraft 
manufactured and in use; 

(3) the current system for determining li- 
ability and damages for compensating indi- 
viduals injured in general aviation accidents 
is inadequate; 

(4) competent general aviation manufac- 
turers and component part manufacturers 
are ceasing or limiting production of general 
aviation aircraft or some models of such air- 
craft because of the increasing costs and un- 
availability of product liability insurance; 

(5) the increase in the number of liability 
claims and the size of awards and settle- 
ments, and the excessive time and expense 
devoted to the resolution of such claims, 
impose a substantial economic burden on 
general aviation manufacturers and their 
dealers; 

(6) the Federal Government has an inter- 
est in the general aviation accident liability 
system because the Federal Government 



has established a comprehensive system for 
regulating general aviation, including— 

(A) establishing standards for design, con- 
struction, and certification of general avia- 
tion aircraft, 

(B) establishing standards for mainte- 
nance of aicraft, licensing of repair facili- 
ties, and licensing of persons who may per- 
form or approve maintenance, repairs, and 
inspections, 

(C) establishing standards for training and 
licensing of pilots, 

(D) establishing a comprehensive air con- 
trol system, 

(E) conducting investigations to determine 
the probable cause of aviation accidents and 
prevent future accidents, and 

(F) conducting other activities necessary 
to assure a safe air transportation system; 
and this Federal system is the exclusive 
legal authority for regulating aviation oper- 
ations and safety; 

(7) it is in the national interest to reduce 
unnecesary expenditures related to general 
aviation accident liability claims while pro- 
viding more rapid and more efficient com- 
pensation for individuals harmed in general 
aviation accidents; and 

(8) Federal action to reform the general 
aviation accident liability system will result 
in— 

(A) the maintenance of airworthy general 
aviation aircraft; and 

(B) a more rational general aviation acci- 
dent liability system. 

(b) It is the purpose of this Act to estab- 
lish standards for determining liability for 
harm arising out of general aviation acci- 
dents. 

DEFINITIONS 

Sec 3. As used in this Act, the term— 

(1) "Administrator" means the Adminis- 
trator of the Federal Aviation Administra- 
tion; 

(2) "claimant" means any person who 
brings a general aviation accident liability 
action subject to this Act, and any person 
on whose behalf such an action is brought, 
including— 

(A) the claimant's decedent; and 

(B) the claimant's parent or guardian, if 
the action is brought through or on behalf 
of a minor or incompetent; 

(3) "general aviation accident" means any 
accident which arises out of the operation 
of any general aviation aircraft and which 
results in harm; 

(4) "general aviation aircraft" means any 
aircraft for which a type certificate or an 
airworthiness certificate has been issued by 
the Administrator under the Federal Avia- 
tion Act of 1958 (49 App. U.S.C. 1301 et seq.) 
which, at the time such certificate was origi- 
nally issued, had a maximum seating capac- 
ity of fewer than twenty passengers, and 
which is not, at the time of the accident, en- 
gaged in scheduled passenger carrying oper- 
ations as defined in regulations issued under 
the Federal Aviation Act of 1958 (49 App. 
U.S.C. 1301 et seq.); 

(5) "general aviation manufacturer" 
means— 

(A) the builder or manufacturer of the air- 
frame of a general aviation aircraft; 

(B) the manufacturer of the engine of a 
general aviation aircraft; and 

(C) the manufacturer of any system, com- 
ponent, subassembly, or other part of a gen- 
eral aviation aircraft; 

(6) "harm" means— 

(A) property damage or bodily injury sus- 
tained by a person; 




28344 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



(B) death resulting from such bodily 
injury; 

(C) pain and suffering which is caused by 
such bodily injury; and 

(D) emotional harm (including bereave- 
ment and loss of affection, care, or society) 
which is caused by such bodily injury; 

(7) "product" means a general aviation 
aircraft and any system, component, subas- 
sembly, or other part of a general aviation 
aircraft; and 

(8) "property damage" means physical 
injury to tangible property, including loss of 
use of tangible property. 

preemption: applicability 
Sec. 4. (a) This Act supersedes any State 
law regarding recovery, under any legal 
theory, for harm arising out of a general 
aviation accident, to the extent that this 
Act establishes a rule of law or procedure 
applicable to the claim. 

(b) Nothing in this Act shall be construed 
to supersede or to waive or affect any de- 
fense of sovereign immunity asserted by the 
United States or any State. 

(c) Nothing in this Act shall be construed 
to affect the liability of a manufacturer, 
owner, or operator of any aircraft that is 
not a general aviation aircraft, or a person 
who repairs, maintains, or provides any 
other support for any aircraft that is not a 
general aviation aircraft, for damages for 
harm arising out of the operation of an air- 
craft that is not a general aviation aircraft. 

(d) No right of action for harm exists 
under this Act if that right would be incon- 
sistent with the provisions of any applicable 
workers' compensation law. 

(e) The provisions of this Act shall apply 
only to— 

(1) any manufacturer, owner, or operator 
of any general aviation aircraft, and any 
person who repairs, maintains, or provides 
any other support for such an aircraft; 

(2) any occupant of a general aviation air- 
craft at the time of a general aviation acci- 
dent, and any person who brings an action 
for harm caused by such accident on behalf 
of such occupant; and 

(3) any nonoccupant of a general aviation 
aircraft at the time of a general aviation ac- 
cident, only if such nonoccupant is bringing 
an action for harm caused by such accident 
which arises out of the harm to an occupant 
of such aircraft at the time of such accident. 

UNIFORM STANDARDS OF LIABILITY FOR 
GENERAL AVIATION ACCIDENTS 

Sec 5. (a) Any person claiming damages 
for harm arising out of a general aviation 
accident may bring an action against a party 
and may recover damages from such party, 
if such party was negligent and such negli- 
gence is a proximate cause of the claimant's 
harm. 

(b)(1) Any person claiming damages for 
harm arising out of a general aviation acci- 
dent may bring an action against a general 
aviation manufacturer of a product and may 
recover damages from such general aviation 
manufacturer if— 

(A) the product, when it left the control 
of the manufacturer, was in a defective con- 
dition unreasonably dangerous for its in- 
tended purpose, according to engineering 
and manufacturing practices which were 
reasonably feasible; 

(B) the defective condition is a proximate 
cause of the claimant's harm; and 

(C) the general aviation aircraft was being 
used at the time of the accident for a pur- 
pose and in a manner for which it was de- 
signed and manufactured. 

(2) Any person claiming damages for harm 
arising out of a general aviation accident 



may bring an action against a general avia- 
tion manufacturer of a product and may re- 
cover damages from such general aviation 
manufacturer if— 

(A) at the time the product left the con- 
trol of the manufacturer, the manufactur- 
er— 

(i) knew, or in the exercise of reasonable 
care should have known, about a danger 
connected with the product that caused the 
claimant's harm; and 

(ii) failed to provide the warnings or in- 
structions that a person exercising reasona- 
ble care would have provided with respect to 
the danger which caused the harm alleged 
by the claimant, unless such warnings or in- 
structions, if provided, would not have ma- 
terially affected the conduct of the user of 
the product; or 

(B) after the product left the control of 
the general aviation manufacturer, the 
manufacturer— 

(i) knew, or in the exercise of reasonable 
care should have known, about the danger 
which caused the claimant's harm; and 

(ii) failed to take reasonable steps to pro- 
vide warnings or instructions, after the 
manufacturer of the product, which would 
have been provided by a person exercising 
reasonable care, unless such warnings or in- 
structions, if provided, would not have ma- 
terially affected the conduct of the product 
user; 



and the failure to provide warnings or in- 
structions described in subparagraph (A) or 
(B) of this paragraph is a proximate cause 
of the claimant's harm. 

(3) Any person claiming damages for harm 
arising out of a general aviation accident 
may bring an action against a general avia- 
tion manufacturer of a product and may re- 
cover damages from such general aviation 
manufacturer if — 

(A) the manufacturer made an express 
warranty with respect to the product; 

(B) such warranty relates to that aspect of 
the product which caused the harm; 

(C) the product failed to conform to such 
warranty; and 

(D) the failure of the product to conform 
to such warranty is a proximate cause of the 
claimant's harm. 

(c)(1) In an action governed by subsection 
(b) of this section, a general aviation manu- 
facturer shall not be liable if such manufac- 
turer proves, by a preponderance of the evi- 
dence, that— 

(A) the defective condition could have 
been corrected by compliance with action 
described in an airworthiness directive 
issued by the Administrator or a service bul- 
letin issued by the manufacturer of the 
product; and 

(B) such directive or service bulletin was 
issued at a reasonable time before the date 
of the accident and after the product left 
the control of the general aviation manufac- 
turer. 

(2) In any action governed by subsection 
(b) of this section, evidence of compliance 
with standards, conditions or specifications 
established, adopted or approved by the 
Federal Aviation Administration shall be ad- 
missible with regard to whether the product 
was defective and unreasonably dangerous 
for its intended purpose. 

COMPARATIVE RESPONSIBILITY 

Sec 6. (a) All actions for harm arising out 
of a general aviation accident shall be gov- 
erned by the principles of comparative re- 
sponsibility. Comparative responsibility at- 
tributed to the claimant's conduct shall not 
bar recovery in an action under this Act, but 
shall reduce any damages awarded to the 



claimant in an amount proportionate to the 
responsibility of the cliamant. the trier of 
fact shall determine comparative responsi- 
bility by making findings indicating the per- 
centage of total responsibility for the claim- 
ant's harm attributable to the claimant, 
each defendant, each third-party defendant, 
and any other person not a party to the 
action. 

(b) Except as provided in subsection (c) of 
this section, a defendant is severally but not 
jointly liable in any action for harm arising 
out of a general aviation accident, and the 
liability of any defendant in any such action 
shall be determined on this basis of such de- 
fendant's proportionate share of responsi- 
bility for the claimant's harm. 

(c) In any action for harm arising out of a 
general aviation accident— 

(Da general aviation manufacturer who is 
the builder or manufacturer of the airframe 
of the general aviation aircraft involved is 
jointly and severally liable for harm caused 
by a defective system, component, subas- 
sembly, or other part of such aircraft that 
the manufacturer installed or certified as 
part of the original type design for such air- 
craft; and 

(2) a general aviation manufacturer who is 
the manufacturer of a system or component 
of the general aviation aircraft involved is 
jointly and severally liable for damages 
caused by a defective subassembly or other 
part of such system or component. 

(d) A general aviation manufacturer and 
any other person jointly liable under sub- 
section (c) of this section shall have the 
right to bring an action for indemnity or 
contribution against any person with whom 
they are jointly liable under subsection (c) 
of this section. 



TIME LIMITATION ON LIABILITY 

Sec 7. (a) Except as provided in subsec- 
tion (b) of this section, no civil action for 
harm arising out of a general aviation acci- 
dent which is brought against a general 
aviation manufacturer may be brought for 
harm which is alleged to have been caused 
by an aircraft or a system, component, sub- 
assembly, or other part of an aircraft and 
which occurs more than— 

(1) twenty years from— 

(A) the date of delivery of the aircraft to 
its first purchaser or lessee, if delivered di- 
rectly from the manufacturer; or 

(B) the date of first delivery of the air- 
craft to a person engaged in the business of 
selling or leasing such an aircraft; or 

(2) with respect to any system, compo- 
nent, subassembly, or other part which re- 
placed another product in, or which was 
added to, the aircraft, and which is alleged 
to have caused the claimant's harm, twenty 
years from the date of the replacement or 
addition. 

(b) Subsection (a) of this section does not 
apply in the case of harm to a claimant 
which occurs after the period set forth in 
subsection (a) of this section if the general 
aviation manufacturer or the seller of the 
product that caused the claimant's harm 
gave an express warranty that the product 
would be suitable, for the purpose for which 
it was intended, for a longer period of time. 

(c) Nothing in this section shall be con- 
strued to affect a person's duty to provide, 
after the sale or lease of an aircraft, to air- 
craft owners, and to repair facilities to 
which a license or certificate to perform re- 
pairs has been issued by the Administrator, 
additional or modified warning or instruc- 
tions regarding the use or maintenance of 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28345 



such aircraft or any system, component, or 
other part of such aircraft. 

SUBSEQUENT REMEDIAL MEASURES 

Sec. 8. In any general aviation accident li- 
ability action governed by this Act, evidence 
of any measure taken after an event which, 
if taken previously, would have made the 
event less likely to occur is not admissible to 
provide liability. Such evidence is admissible 
to the extent permitted under rule 407 of 
the Federal Rules of Evidence. 

ADMISSIBILITY OF CERTAIN EVIDENCE 

Sec. 9. In an action governed by this Act, 
evidence of Federal, State, or local income 
tax liability or any Social Security or other 
payroll tax liability attributable to past or 
future earnings, support, or profits and the 
present value of future earnings, support, or 
profits alleged to have been lost or dimin- 
ished because of harm arising out of a gen- 
eral aviation accident is admissible regard- 
ing proof of the claimant's harm. 

PUNITIVE DAMAGES 

Sec 10. (a) Punitive damages may be 
awarded in an action under this Act for 
harm arising out of a general aviation acci- 
dent only if the claimant establishes by 
clear and convincing evidence that the harm 
suffered was the direct result of conduct 
manifesting a conscious, flagrant indiffer- 
ence to the safety of the those persons who 
might be harmed by use of the general avia- 
tion aircraft involved. 

(b) Evidence regarding the financial worth 
of a defendant or the defendant's profits or 
any other evidence relating solely to a claim 
for punitive damages under this Act is not 
admissible unless the claimant establishes, 
before any such evidence is offered, that the 
claimant can present evidence that will es- 
tablish prima facie proof of conduct mani- 
festing a conscious, flagrant indifference to 
the safety of those persons who might be 
harmed by use of the general aviation air- 
craft involved. 

(c) In any civil action in which the alleged 
harm to the claimant is death and the appli- 
cable State law provides, or has been con- 
strued to provide, for damages only punitive 
in nature, a defendant may be liable for any 
such damages pursuant to the provisions of 
this Act regardless of whether a claim is as- 
serted under this section. The recovery of 
any such damages shall not bar a claim 
under this section. 

TIME LIMITATION ON BRINGING ACTIONS 

Sec. 11. (a) Any action for harm arising 
out of a general aviation accident shall be 
barred, notwithstanding any State law, 
unless— 

(1) the complaint is filed within two years 
after the date on which the accident oc- 
curred which caused the claimant's harm; 
and 

(2) the summons and complaint are prop- 
erly served upon the defendant within one 
hundred and twenty days after the filing of 
such complaint, unless the party on whose 
behalf such service is required can show 
good cause why such service was not made 
within such one-hundred-and-twenty-day 
period. 

Paragraph (2) of this subsection shall not 
apply to service of process in a foreign coun- 
try pursuant to rule 4(i) of the Federal 
Rules of Civil Procedure or any similar 
State law. 

SANCTIONS 

Sec. 12. It is the intent of Congress that, 
with respect to any action governed by this 
Act, the sanctions for violation of rule 11 of 
the Federal Rules of Civil Procedure, in- 



cluding orders to pay to the other party or 
parties the amount of their reasonable ex- 
penses, including a reasonable attorney's 
fee, be strictly enforced. 

JURISDICTION 

Sec. 23. (a) The district courts of the 
United States, concurrently with the State 
courts, shall have original jurisdiction, with- 
out regard to the amount in controversy, in 
all civil actions for harm arising out of a 
general aviation accident and in all actions 
for indemnity or contribution described in 
section 6(d) of this Act. 

(b) A civil action which is brought in a 
State court may be removed to the district 
court of the United States for the district 
embracing the place where the action is 
pending, without the consent of any other 
party and without regard to the amount in 
controversy, by any defendant against 
whom a claim in such action is asserted for 
harm arising out of a general aviation acci- 
dent. 

(c) In any case commenced in or removed 
to a district court of the United States 
under subsection (a) or (b) of this section, 
the court shall have jurisdiction to deter- 
mine all claims under State law that rise out 
of the same general aviation accident, if a 
substantial question of fact is common to 
the claims under State law and to the Fed- 
eral claim, defense, or counterclaim. 

(d)(1) A civil action in which the district 
courts of the United States have jurisdiction 
under subsection (a) of this section may be 
brought only in a district in which— 

(A) the accident giving rise to the claim 
occurred; or 

(B) any plaintiff or defendant resides. 

(2) In an action pending in a district court 
of the United States under paragraph (1) of 
this subsection, a district court may, on 
motion of any party or its own motion, 
transfer the action to any other district for 
the convenience of parties and witnesses in 
the interest of justice. 

Mrs. KASSEBAUM. Mr. President, I 
ask unanimous consent that the name 
of Senator Dole be added as a cospon- 
sor of my amendment. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. DOLE. Mr. President, I rise in 
support of the amendment offered by 
my distinguished colleague from 
Kansas, Senator Kassebaum, and I 
commend her untiring leadership of 
the issue of product liability for the 
aviation industry. This amendment, 
which I am pleased to cosponsor, is es- 
sentially the text of S. 473, the Gener- 
al Aviation Accident Liability Stand- 
ards Act. Since the 99th Congress, we 
have been trying to get this legislation 
enacted and now find ourselves in the 
position of having to take this ap- 
proach. 

SUPPORT FOR S. 473 

Extensive hearings have been held 
on this bill in the Commerce Commit- 
tee, and the testimony has document- 
ed a liability crisis of serious dimen- 
sions. This legislation in the 99th Con- 
gress, S. 2794, was reported out of the 
Commerce Committee without objec- 
tion. S. 473 was also reported out of 
the Commerce Committee, and also 
discharged from the Judiciary Com- 
mittee. Some of my colleagues may 



not be in agreement with this amend- 
ment, but it does have substantial sup- 
port. The administration supports it— 
the Department of Commerce sup- 
ports it, and the Justice Department 
supports it. Further, all of the nation- 
al general aviation consumer groups 
support S. 473. This kind of support 
for product liabillity reform on the 
part of both manufacturers and users 
presents a rather unique situation. 

CONDITION OF GENERAL AVIATION INDUSTRY 

Mr. President, the general aviation 
industry in this country is in deep 
trouble and needs help. Jobs are being 
lost, export markets are being lost. 
Quite plainly, the recent dramatic in- 
creases in costs associated with prod- 
uct liability have resulted in serious fi- 
nancial difficulties for this industry. 
My concern is based on my view that 
this is the right policy, and also that 
Wichita, KS, is the home of the 
Beechcraft, Cessna, and Lear compa- 
nies. 

Let me describe the seriousness of 
the costs associated with product li- 
ability for the aviation industry. The 
total amount paid out by general avia- 
tion manufacturers and their insurers 
in liability claims about 10 years ago 
was $24 million. That same cost today 
is $200 million, and it is rising. It 
makes no sense considering that this 
outrageous increase occurred during a 
period where the safety record of gen- 
eral aviation has greatly improved. 

In 1979, over 17,000 general aviation 
aircraft were sold in the United States. 
In 1987, there were only 1,495 air- 
planes sold. The statistics speak for 
themselves. The dramatic decline of 
America's general aviation competi- 
tiveness is largely due to the devastat- 
ing effects of our current product li- 
ability situation; the future of this 
entire industry depends upon the reso- 
lution of this serious problem. 

The economic impact of this situa- 
tion is severely felt by the local com- 
munity, as well as the industry at 
large. This means jobs for people who 
work at these companies, jobs for 
people who provide goods and services 
to these people. 

General aviation manufacturers are 
primarily self -insured, so this is not a 
commercial insurance problem. It is 
fast becoming impossible for general 
aviation manufacturers to secure in- 
surance at any level. The lack of 
access to this kind of protection is be- 
coming a crisis, because there are only 
a few domestic insurance companies 
that provide any type of aviation li- 
ability insurance. Many general avia- 
tion manufacturers try to self-insure 
most of their risks, but they can't self- 
insure against the extraordinary rise 
in levels of risk that have occurred in 
recent years. 

WHAT THIS AMENDMENT WOULD DO 

Mr. President, it should be made 
clear at the outset that this amend- 








28346 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



ment is not an aviation manufacturers* 
relief bill. If it were, we would not be 
standing up on the floor in support of 
it. Our amendment would create uni- 
form Federal standards of liability, 
which have not been developed in an 
arbitrary way. Rather, they reflect the 
results of extensive negotiations and 
accommodations with the various in- 
terest involved. These uniform stand- 
ards are absolutely critical, and there 
is extensive precedent for setting 
those standards at the Federal level. 
Currently, the Federal Government 
regulates the aviation industry from 
design to production. It regulates the 
training and licensing of pilots and 
mechanics. In addition, the air traffic 
control system is federally operated 
and regulated. 

The language of this amendment 
does not cap damages in any way. It 
does not cap or limit attorneys fees or 
waive the manufacturers' responsibil- 
ity to supply warnings against poten- 
tial dangers. In fact, those responsibil- 
ities would continue regardless of the 
age of the product. Further, the 
amendment would not limit the right 
to sue. Therefore, it is somewhat baf- 
fling to me that some of my colleagues 
would continue to oppose this meas- 
ure. 

This amendment would retain strict 
liability and it retains completely joint 
and several liability between the man- 
ufacturers of all subsystems and com- 
ponent parts. But, it would enact com- 
parative responsibility among other 
parties, as well as establish a 20-year 
statute of repose for aircraft and re- 
placement parts, which would begin 
again each time a part is replaced. 

There is an extensive Federal pres- 
ence and involvement in aviation. One 
of the few exceptions in the area of 
litigation, which is conducted under 
individual and widely varying State 
laws. In our view, Federal product li- 
ability standards are necessary to pro- 
vide uniformity and predictability. I 
urge my colleagues to support this 
measure, because of its extreme impor- 
tance to the general aviation industry. 

Mrs. KASSEBAUM. Mr. President, 
the amendment pending at the desk is 
the text of S. 473, the General Avia- 
tion Accident Liability Standards Act. 
Let me begin first by saying that this 
is not the way I would have preferred 
to approach this matter. 

For a number of years now, I have 
attempted to bring my concerns as 
well as the concern of others, over 
aviation accident liability standards to 
the Senate floor. I introduced legisla- 
tion to address the need for uniform 
standards at the beginning of this 
Congress. I also introduced similar leg- 
islation in the 99th Congress. 

Both of those bills— S. 473 this Con- 
gress and S. 2794 last Congress— were 
reported out of the Commerce Com- 
mittee; in the case of S. 2794, the 
report was without objection. 



The Commerce Committee has, for 
two Congresses — running now, heald 
hearings on this legislation. The testi- 
mony taken at those hearings docu- 
mented a liability crisis of major— if 
not catastrophic— proportions. 

In addition to Commerce Committee 
hearings, the pending amendment has 
twice been referred to the Judiciary 
Committee— last Congress, in reponse 
to an informal request: this Congress, 
in reponse to a formal request. The 
measure was discharged from the Ju- 
diciary Committee earlier this year 
after hearings wer held by that com- 
mittee. 

The bill— now pending as an amend- 
ment—has widespread support. It is 
supported by the administration. It is 
supported by the Department of Jus- 
tice. It is supported by the Depart- 
ment of Commerce. It is supported by 
the Separtment of Transportation. I 
ask unanimous consent that letters of 
support from these three Cabinet De- 
partments be printed in the Record. 

There being no objection, the letter 
were orderd to be printed in the 
Record, as follows: 

The Secretary of Commerce, 
Washington, DC, September 6, 1988. 
Hon. Nancy Landon Kassebaum, 
United States Senate, 
Washington, DC. 

Dear Nancy: Thank you for your letter re- 
garding S. 473, the "General Aviation Acci- 
dent Liability Standards Act." The general 
aviation inudstry has been particularly hard 
hit in recent years with rising product liabil- 
ity costs and the inadequacies of the tort li- 
ability system being major contributing fac- 
tors to the decline. The Department of 
Commerce thinks that S. 473 is a very posi- 
tive response to the problems of the general 
aviation industry. We also think that the 
success of this bill in obtaining meaningful 
Federal tort reform for the aviation indus- 
try will increase efforts to obtain compre- 
hensive reform of the entire tort system. 

We will continue to work actively within 
the Administration , with Congress and with 
the business community to obtain signifi- 
cant Federal reform of the tort system by 
lending our support for legislation like S. 
473. 

We have been advised by the Office of 
Management and Budget that there is no 
objection to the submission of this report to 
the Congress from the standpoint of the Ad- 
ministration's program. 
Sincerely, 

Bill, 
Secretary of Commerce. 
Department of Transportation, 
Washington, DC, June 21, 1988. 
Hon. Joseph R. Biden, 

Chairman, Committee on the Judiciary, U.S. 
Senate, Washington, DC. 
Dear Mr. Chairman: The Department of 
Transportation would like to provide its 
views on S. 473 as reported June 2 from the 
Committee on Commerce, Science, and 
Transportation, the "General Aviation Acci- 
dent Liability Standards Act of 1988." 

This Department is seriously concerned 
about the tort liability crisis, especially as it 
affects the manufacture of general aviation 
aircraft. The tort liability systme is threat- 
ening the existence of the domestic manu- 
facture of general aviation aircraft and, if 
left uncorrected, this industry may well be 



forced to move offshore to survive. Product 
liability insurance for these manufacturers 
is so expensive, and the deductibles are so 
high that manufacturers are no longer able 
to protect themselves adedquately from the 
effects of this exposure. Even where a man- 
ufacturer's alleged negligence is only a 
small factor in a general aviation accident, 
the lack of other financially response par- 
ties will make a manufacturer in effect the 
insurer of last resort under widely accepted 
principles of joint and several liability. 
Thus, a single judgment alleging a defect in 
a plane manufactured over twenty years ago 
can rob a manufacturer of its profits for an 
entire year, no matter how insignificant the 
risk caused by the alleged defect. 

In our judgment, the bil takes a significan 
step towards correcting these and other in- 
equities in the operation of the tort system 
for this particular industry. Accordingly, 
the Department supports the bill, deferring 
to the Department of Justice on technical 
aspects of the drafting. 
Sincerly, 

B. Wayne Vance. 

Department of Justice, 
Office of Legislative Affairs, 
Washington, DC, July 26, 1988. 
Hon. Robert C. Byrd, 

Senate Majority Leader, U.S. Senate, Wash- 
ington, DC. 
Dear Mr. Leader: It has come to the De- 
partment's attention that S. 473, the Gener- 
al Aviation Accident Liability Standards Act 
of 1987, has reached the floor of the Senate 
and may soon be considered there. The De- 
partment previously provided its views on 
the bill in a letter dated June 13, 1988, to 
Senator Ernest F. Hollings, Chairman of the 
Committee on Commerce, Science, and 
Transportation. Apparently, there is some 
confusion about our position on S. 473. I 
would like to take this opportunity to erase 
any ambiguities. 

The Department has steadfastly support- 
ed tort reform measures as a means of re- 
solving the product liability problems faced 
by our American companies, and we have 
been seeking a comprehensive national ap- 
proach to product liability reform rather 
than industry-by-industry reforms. This 
preference, however, does not draw the De- 
partment into opposition to this legislation, 
which offers generally well considered and 
workable solutions to the problems faced by 
the domestic general aviation industry. Our 
letter of June 13, 1988 did not oppose the 
bill. Rather, it was intended to focus on sev- 
eral amendments, technical in nature, that 
will add to the clarity and purpose of the 
bill. 

As we stated in our letter to Chairman 
Hollings, the provisions of S. 473 should not 
be viewed as preempting the rights of States 
to pass additional tort reform measures 
deemed appropriate. For this reason, we 
suggested adding the language from the De- 
partment's product liability legislation: 

"The provisions of this Act shall preempt 
and supersede any State law to the extent 
such law is inconsistent with the limitations 
contained in such provisions. The provisions 
of this Act shall not preempt or supersede 
any State law that provides defenses or 
places limitations on a person's liability in 
addition to those contained in this Act." 

We would hope that this language, or 
similar language will be offered as an 
amendment to the Bill. 

Section 4(b) of S. 473 preserves to the 
United States sovereign immunity defenses 
in the following language: 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28347 



"Nothing in this Act shall be construed to 
supersede or to waive or affect any defense 
of sovereign immunity asserted by the 
United States or any State." 

This savings clause, without some clarifi- 
cation, may affect the Federal Tort Claims 
Act's ("FTCA") statutory framework in 
ways which are not intended, such as FTCA 
provisions affecting venue. To alleviate any 
ambiguity, therefore, we suggest that a new 
phrase be added to the end of the savings 
clause, at section 4(b), to provide the follow- 
ing: 

"Nor shall any provision of this Act be 
construed to supersede, waive or affect any 
condition, limitation, or procedure pertain- 
ing to any claim, action, or proceeding for 
damages otherwise applicable to the United 
States or any State." 

The only additional technical change we 
feel is necessary would be to adopt the 
"amount in controversy" jurisdictional 
limits of Federal District Courts found at 28 
U.S.C. § 1332. This amendment could be ef- 
fected by deleting from section 13(a), the 
phrase "without regard to the amount in 
controversy" and substituting in its place 
the phrase "in cases where the amount in 
controversy exceeds the sum provided in 28 
U.S.C. § 1332(a)." This would be consistent 
with current federal court practice, and 
would ensure that less complex matters in- 
volving small amounts in controversy (i.e., 
below $10,000) would not be brought in fed- 
eral district courts. This would avoid any 
unnecessary burden being placed on the al- 
ready overcrowded federal court system. 

As previously stated, we believe these 
amendments are technical in nature, and as 
such, do not reflect on the substantive desir- 
ability of adopting S. 473, which the Depart- 
ment otherwise supports. We hope the 
Senate will move swiftly in acting favorably 
on this legislation. 

The Office of Management and Budget 
has advised this Department that there is 
no objection to the presentation of this 
report from the standpoint of the Adminis- 
tration's program. 
Sincerely yours, 

Thomas M. Boyd, 
Acting Assistant Attorney General. 

Mrs. KASSEBAUM. The Office of 
Management and Budget has indicat- 
ed it has no objection to the measure. 

In addition, Mr. President, all of the 
national general aviation consumer 
groups support S. 473. This support 
for product liability reform by both 
manufacturers and users is unique. 
The measure is supported by the Air- 
craft Owners and Pilots Association, 
the National Business Aircraft Asso- 
ciation, the National Air Transporta- 
tion Association, the National Agricul- 
tural Aircraft Association, the Experi- 
mental Aircraft Association the Heli- 
copter Association International, and 
the General Aviation Manufacturers 
Association. 

I am offering this amendment be- 
cause the general aviation industry in 
the United States is in serious trouble. 
The industry is on the brink of finan- 
cial disaster because of recent dramat- 
ic increases in the costs associated 
with product liability. 

Only 10 short years ago, $24 million 
was the total amount paid out by gen- 
eral aviation manufacturers and their 
insurers in liability claims. Today, that 



number is well over $200 million. This 
astronomical increase occurred over a 
period where the safety record of gen- 
eral aviation has greatly improved. 

The source of this increase has not 
been in the number of claims against 
manufacturers. The increase has come 
in the size of the awards and in the ex- 
panding number of situations in which 
manufacturers are held responsible for 
damages. 

It is important to understand that 
this is not an insurance problem. Gen- 
eral aviation manufacturers are pri- 
marily self-insured. In fact, last year, 
all major manufacturers were self-in- 
sured for the first $100 million. And, if 
it is fast becoming impossible for gen- 
eral aviation manufacturers to secure 
insurance at any level. 

Only a handful of domestic insur- 
ance companies provide any type of 
aviation liability insurance. As a result 
of several lawsuits, these companies 
are not subject to the provisions of the 
McCarren-Ferguson Act. They are 
exempt from Federal anititrust law 
with regard to insurability and rate 
issues. 

To address that crisis, the pending 
amendment proposes the creation of 
Federal liability standards. Those 
standards were not selected in an arbi- 
trary fashion. They are the product of 
many, many hours of negotiation. 
They reflect accommodations made 
over the past 4 years, including accom- 
modations reached with those who 
will oppose the measure on the floor 
today. 

The pending amendment is not an 
aviation manufacturers relief bill. The 
language of the amendment retains 
strict liability. It retains completely, 
joint and several liability between the 
manufacturers of all subsystems and 
component parts and enacts compara- 
tive responsibility among other par- 
ties. It also established a 20-year stat- 
ute of repose for aircraft and replace- 
ment parts— which begins anew each 
time a part is replaced. 

The amendment does not cap dam- 
ages in any way. It does not cap or 
limit attorneys' fees. It does not waive 
the manufacturers responsibility to 
supply warnings against dangers. 
Those responsibilities continue regard- 
less of the age of the product. The 
amendment does not limit the right to 
sue. 

What the amendment does do is es- 
tablish uniform Federal standards of 
liability. Uniform standards are criti- 
cal, and there is ample precedent for 
setting those standards at the Federal 
level. The Federal Government regu- 
lates the aviation industry from design 
to production. It regulates the training 
and licensing of pilots and mechanics. 
The air traffic control system is feder- 
ally operated and regulated. 

The Federal interest and presence in 
aviation is all pervasive except in one 
area. Litigation is conducted under in- 



dividual and widely varying State laws. 
Federal product liability standards are 
necessary to provide uniformity and 
predictability. 

In 1979, over 17,000 general aviation 
aircraft were sold in the United States. 
In 1987 there were only 1,495 units 
sold; a dramatic change. The erosion 
of U.S. general aviation competitive- 
ness is, in great part, the result of the 
devastating effects of our current 
product liability environment; its 
future is largely dependent on the res- 
olution of the problem. 

Unemployment in the domestic in- 
dustry has risen to a staggering 65 per- 
cent. Such massive unemployment not 
only strips workers of a means of live- 
lihood, it takes away the skills and 
dedicated work force necessary if we 
are to ever rebuild this industry. 

Technology and innovation are 
being stifled because of prohibitive 
product liability costs. Airframe manu- 
facturers are finding it increasingly 
difficult to find component manufac- 
turers, as many businesses are totally 
giving up their aviation product lines 
as too costly to maintain. All of this 
adds up to even more American jobs 
lost. The increasing export of our in- 
dustry is a tragedy. It is an area we 
have always excelled in, and it is one 
in which we are really rapidly losing 
ground. 

The product liability problem facing 
the U.S. general aviation industry is 
much more than a domestic problem. 
The harm it causes is reflected in gen- 
eral aviation trade figures. Prior to 
1981, U.S. general aviation exports 
contributed an annual multimillion 
dollar surplus to our Nation's balance 
of trade. In 1981, and every year since, 
the U.S. general aviation industry has 
suffered significant trade deficits- 
contributing to the national trade def- 
icit, which has become a matter of 
grave concern. 

Foreign manufacturers stand to be 
big winners if this product liability 
problem is not resolved. Their tort li- 
ability pales in comparison with that 
of the large U.S. manufacturers. This 
is in large part due to the fact that 
they do not have enormous numbers 
of aircraft in service in the United 
States, each of which remains a liabil- 
ity of the manufacturer, regardless of 
age. There is a significantly smaller 
percentage of foreign aircraft in serv- 
ice in the United States subject to our 
domestic tort laws. That results in 
considerably lower liability risk and a 
considerable competitive advantage 
for foreign manufacturers. 

This same lack of competitive pric- 
ing is taking its toll on the U.S. market 
as well. Cessna Aircraft, the world's 
largest general aviation manufacturer, 
has suspended production of all 
piston-engine aircraft. Piper Aircraft 
has stated it may be forced to manu- 
facture only one piston-engine air- 





19-059 0-89-3 (Pt. 20) 



28348 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



craft. Beech Aircraft has cut back its 
production significantly. As foreign 
manufacturers move in to fill this near 
vacuum in domestic airplane supplies, 
the U.S. industry's negative trade bal- 
ance will likely increase. 

Mr. President, the pending amend- 
ment is fair and balanced. It attempts 
to afford judicial protections to both 
plaintiff and defendant. The amend- 
ment would guarantee compensation 
for innocent victims that is timely and 
fair. But, it would do so in a manner 
that provides treatment of product 
manufacturers that is reasonable and 
just. That, as simply as I can put it, is 
the purpose of this amendment. I urge 
its adoption. 

Mr. GRASSLEY. Mr. President, I 
am pleased to rise in support of S. 430, 
the Retail Competition Enforcement 
Act, and explain my part in working 
out this compromise that is now S. 
430, and to say that I think that the 
amendment that we have before us in 
the way of the Rudman amendment 
tends to do harm to that compromise 
and keep the bill from being a success- 
ful piece of legislation. 

The DeConcini-Grassley-Metzen- 
baum-Leahy substitute that we consid- 
er today is the product of long hours 
of discussion and negotiation among 
many in the business community and 
those representing discount retailers- 
all mediated with great skill by my col- 
leagues on the Judiciary Committee. I 
am pleased to have played a role in 
the compromise we have before us 
today. 

The final product that has emerged 
is worthy of the Senate's support. 

I would like to specifically commend 
the contents of the committee report 
to my colleagues. It is a careful de- 
scription of what S. 430 does— and 
what it does not do. This bill has two 
relatively modest, yet important, pur- 
poses relating to the law of vertical 
price fixing. I would like to briefly dis- 
cuss these objectives. 

Section 8(a) of the bill addresses a 
type of vertical price-fixing in which it 
is claimed that a dealer has attempted 
to eliminate a competing dealer's price 
competition by causing a common sup- 
plier to discontinue sales to the com- 
peting dealer. Since the Supreme 
Court decided the Monsanto versus 
Spray-Rite Service Corp. case 3 years 
ago, there has been some confusion 
over the evidence that the terminated 
dealer in such a case must present to 
defeat summary judgment and send 
the case to the trier of fact. 

The Monsanto case did not change 
the substantive requirements for proof 
of a vertical price-fixing conspiracy; it 
merely set forth the evidentiary stand- 
ard which a plaintiff would have to 
meet in order to avoid judgment as a 
matter of law due to insufficient evi- 
dence. The Monsanto Court held that 
the mere fact that a terminated dealer 
had been the subject of price-related 



complaints from competing dealers did 
not permit the trier of fact to infer 
that the manufacturer was engaged in 
an illegal price-fixing conspiracy with 
those dealers. 

The plaintiff prevailed in Monsanto 
because it had presented additional 
evidence that tended to show a con- 
spiracy. However, some other language 
in the Court's opinion could be inter- 
preted to impose burdens greater than 
those that the Monsanto plaintiff ac- 
tually had to meet. Specifically, the 
Court said at one point that a termi- 
nated dealer did not raise a triable 
issue unless it produced evidence that 
"tends to exclude the possibility" that 
the supplier acted independently. This 
bill is intended to make clear that a 
terminated dealer need not "prove the 
negative," as suggested by the Mon- 
santo Court. 

This bill is also intended to address 
misinterpretations that have followed 
in the wake of Monsanto, such as Gar- 
ment District Case. In this case, a ter- 
minated dealer failed to survive sum- 
mary judgment, even where it was 
clear that the termination was directly 
caused by the price-related com- 
plaints, accompanied by "economic 
duress, coercion and threats." 

This bill clarifies the Monsanto deci- 
sion in a way that is consistent with 
the actual holding in the case, not the 
restrictive language that may have 
been lifted out of context. 

This bill provides that if a dealer can 
show that certain kinds of price-relat- 
ed communications by other dealers 
were "a major contributing cause" of 
its termination, then the dealer is enti- 
tled to have the trier of fact consider 
whether the supplier and the com- 
plaining dealer "engaged in concerted 
action" to fix resale prices. 

This is an important, but limited 
clarification of the post-Monsanto law. 
This bill does not address summary 
judgment standards for antitrust cases 
generally, nor does it prevent the 
granting of summary judgment to de- 
fendants in appropriate situations. 
Indeed, S. 430 contemplates that sum- 
mary judgment is still available to de- 
fendants in vertical price-fixing cases. 

S. 430 does not set out a precise 
roadmap for courts. Instead, it is de- 
signed to direct a court to consider 
whether a reasonable trier of fact 
could find that one, a competitor of a 
retailer or distributor had encouraged 
a supplier to act "to curtail or elimi- 
nate price competition," via "an ex- 
press or implied suggestion, request, or 
demand, including a threat to discon- 
tinue an existing business arrange- 
ment," and two, that as a result of this 
encouragement, the supplier had ter- 
minated or refused to continue supply- 
ing goods to the claimant. 

If a trier of fact could reasonably so 
conclude, summary judgment should 
be denied. The trier of fact is then per- 
mitted to find, on the basis of all the 



evidence presented in the case, that 
there has been an illegal vertical price- 
fixing conspiracy. Of course, the trier 
of fact may also find on the basis of 
the evidence that there has been no 
vertical price-fixing conspiracy. The 
jury is not required by anything in S. 
430 to infer the existence of a vertical 
price-fixing conspiracy. 

The court's determination as to 
whether a trier of fact could reason- 
ably find the two predicate facts de- 
scribed in paragraphs (1) and (2) of 
subsection (a) is to be made on the 
basis of all the record evidence— de- 
fendant's as well as plaintiff's. This 
bill preserves the court's authority to 
withhold a case from the jury if there 
is insufficient evidence of a causal 
nexus between the price complaint 
and the termination, or when the com- 
plaint is insufficient to raise a jury 
issue. 

This bill does not alter the law of 
summary judgment generally. Instead, 
as always, the standards for evaluating 
the sufficiency of the evidence are pre- 
scribed by the Federal Rules of Civil 
Procedure and cases construing the 
Federal rules. 

Importantly, this bill does not ad- 
dress or affect the substantive legal 
standards to be applied by the court 
and the trier of fact in deciding the 
merits of resale price maintenance 
claims under sections 1 and 3 of the 
Sherman Act. 

Important, and longstanding, prece- 
dents such as United States versus 
Colgate— manufacturer has a legiti- 
mate interest in taking unilateral 
action to affect the price at which its 
goods are resold— and Continental TV, 
Inc. versus Sylvania— nonprice vertical 
restraints are subject to a rule-of- 
reason analysis— and others, are nei- 
ther discarded or modified. Such cases 
continue to have vitality as if S. 430 
were not enacted. 

Subsection (b) of S. 430 has a 
modest, but important, objective. That 
is to codify and preserve the long- 
standing rule of antitrust law— dating 
to 1911— that vertical price fixing is 
per se illegal. 

However, S. 430 is not intended to 
codify or change the manner in which 
this per se rule has been applied by 
the courts in the past, or to constrain 
or otherwise affect how the per se rule 
is applied by the courts in the future. 
This bill has nothing to do with cate- 
gorizing certain types of conduct as 
per se illegal. This is, and will continue 
to be, the province of the courts. 

Mr. President, at this point, I am 
constrained to add a footnote with re- 
spect to the bill's effect on the recent 
Supreme Court decision in the Sharp 
case. In my judgment, as a sponsor of 
the proposal before us today, I can 
state clearly that I had no intention of 
overruling, or otherwise affecting, a 
pending Supreme Court case. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28349 



Indeed, earlier versions of the com- 
mittee report on S. 430 contained lan- 
guage which might have been con- 
strued to resolve the issues addressed 
in Sharp. This language was removed 
precisely because we were concerned 
only with procedural aspects of a 
price-fixing case. We specifically did 
not concern ourselves with substantive 
antitrust standards, as the Supreme 
Court did in Sharp. 

This compromise bill was carefully 
crafted, after weeks of discussion. Our 
aim was to make specific clarifications 
to summary judgment standards in re- 
sponse to the Monsanto case, and to 
codify the fact that vertical price 
fixing is per se illegal. 

It would indeed be unfortunate if all 
the hard work that went into this 
compromise would be jeopardized by 
an overly expansive reading of the bill, 
at this late date. 

Aside from the last-minute confu- 
sion, Mr. President, I again salute my 
colleagues and their staffs for their 
their hard work in ensuring that this 
bill accurately reflects the careful ne- 
gotiations that went on over 15 
months ago between all the parties. 

I yield the floor. 

Mr. HEFLIN. Mr. President, today, I 
must rise and express my reservations 
concerning S. 430, the Retail Competi- 
tion Enforcement Act. 

Throughout my tenure in the 
Senate, I have fought hard for the 
working men and women both in Ala- 
bama and throughout the United 
States. Every Member of Congress car- 
ries this burden. In fulfulling our obli- 
gation, we must carefully review pend- 
ing legislation seeking flaws and ambi- 
guities, while being ever mindful of 
the task at hand. 

The Retail Competition Act of 1987 
purports to be a bill which would 
merely codify existing law and ensure 
increased competition and lower retail 
rates. While I did support S. 430 when 
it was considered by the Senate Judici- 
ary Committee, in the intervening 
months since that vote, I have spoken 
with many Alabamians who are very 
concerned about the effects of this 
legislation. I have studied the bill 
more extensively, and I have taken the 
time to talk with many experts about 
this bill. Upon reflection, and mindful 
of my obligation to the people of Ala- 
bama and the United States, I must 
oppose S. 430. 

S. 430 has two substantive sections. 
The proponents of this bill allege the 
first section of this bill merely codifies 
existing case law that vertical price 
fixing is, per se, illegal. However, the 
recent decision of Business Electronics 
Corp- v. Sharp Electronic Corp. (No. 
85-1910, Slip Op. (U.S. 1988), which 
was decided since this bill was voted 
on by the Senate Judiciary Committee 
and since the committee report was 
drafted, has properly clarified the cur- 
rent status of this area of antitrust 



law. In Sharp, the U.S. Supreme Court 
noted, "A vertical price restraint is not 
illegal per se unless it includes some 
agreement on price or price levels." 
(Sharp, Slip Op. at 16). But, the report 
language accompaning S. 430 contains 
language that, "A vertical price-fixing 
conspiracy need not include an agree- 
ment on a specific price or on a price 
level." (S. Rept. No. 280, 100th Cong., 
2d sess. at 12 (1988).) Clearly, there is 
a current disparity between what the 
Supreme Court has ruled and the lan- 
guage in the report. Therefore, this 
legislation will not carry out its pur- 
ported effects. 

Vertical restraints on price or price 
levels are and should be, per se, illegal. 
However, I am equally convinced that 
Congress should not expand the list of 
per se illegal restraints beyond that of 
price and price level, and the effect of 
this legislation would be just such an 
expansion. 

The second major section of this bill 
has even more difficulties. S. 430 
would establish a new evidentiary 
standard applicable to resale price 
maintenance claims. The bill provides 
that where a manufacturer receives a 
communication from a competitor of a 
reseller, that the manufacturer cur- 
tail, or eliminate price competition, 
and where the complaint is a major 
contributing cause of the manufactur- 
ers later terminating the complained 
of supplier, such evidence is sufficient 
to create a jury question on whether a 
vertical restraint of trade existed. 
More importantly, the report language 
accompanying this bill states that the 
above evidence is sufficient "to obtain 
a jury finding of concerned action to 
set, change or maintain prices." (S. 
Rept. No. 280, 100th Cong., 2d sess. at 
9 (1988). The committee report makes 
clear that a plaintiff no longer has to 
present any evidence of conspirary in 
order to reach the jury, or to win his 
case. 

Although, the drafters of S. 430 
state that this bill will merely clarify 
existing law regarding the evidentiary 
standard to be applied in consumer 
termination cases— this is simply not 
the case. In fact, S. 430 would overrule 
the Supreme Court's unanimous deci- 
sion in Monsanto Co. v. Spray-Rite 
Corp- (465 U.S. 752 (1984)). Under cur- 
rent law a conspiracy cannot be proved 
merely by a plaintiff producing evi- 
dence that a dealer communicated 
with a manufacturer about price com- 
petition and thereafter terminated a 
competing dealer. Although, these 
facts are undoubtably probative, 
standing alone they are not currently 
sufficient to allow the case to get to 
the jury. However, this standard 
would be abolished by this legislation. 
This evidentiary change is even 
more difficult when we are reminded 
that we are being asked to amend the 
Sherman Act. The new standard 
would, in practical terms, eliminate 



the requirement of providing or show- 
ing any evidence of conspiracy in order 
for a plaintiff to prevail. The commit- 
tee report accompanying S. 430 makes 
clear that a plaintiff need not present 
any evidence of conspiracy. (See S. 
Rept. No. 280, 100th Cong., 2d Sess. at 
9 (1988).) However, the first section of 
the Sherman Act states its purpose is 
to protect against trusts and conspir- 
acies designed to restrain trade. (See 
15 U.S.C. section 1.) What we are 
being asked to do is to eliminate the 
need for conspiracy evidence when we 
are seeking to prove an illegal conspir- 
acy. Simply put, this makes no sense. 

Additionally, those who believe that 
this section of the bill is proconsumer 
oriented are both mistaken and short- 
sighted. It is well known that con- 
tracts between a manufacturer and a 
dealer are usually beneficial and often 
lead to improvements in distribution 
systems, which leads to efficiency, and 
can result in lower prices and better 
service for all consumers. If this bill is 
enacted it could potentially have a 
chilling affect on communications be- 
tween manufacturers and dealers. This 
would be a direct result of the fear of 
litigation between the parties. Propo- 
nents of S. 430 must not be allowed to 
prevail and create a commercial at- 
mosphere filled with fear of pending 
litigation. 

Further, proponents of S. 430 would 
have us believe that without the pas- 
sage of this bill the day of the dis- 
count store is over— nothing could be 
further from the truth. Since the 
Monsanto decision, the discount trade 
industry has not been harmed. In fact, 
this industry has grown and prospered 
in recent years. Although, we can and 
should be diligent in our efforts to 
protect this strong and important 
business sector, this legislation has the 
potential of unleashing a Pandora's 
box of problems against the entire 
business community. 

In addition to these reasons, I must 
oppose this legislation due to its 
draftsmanship. The Sharp decision 
serves to focus our attention on the 
difficulties in this bill. Even among co- 
sponsors there is disagreement as to 
the effect of this legislation on that 
Supreme Court decision. What better 
evidence do we need to prove that this 
legislation needs more work. We owe 
our constituents our full efforts in 
passing legislation that is needed, and 
will do what its supposed to do. Unfor- 
tunately, this bill fails the test. 

Last, Mr. President, I would like to 
conclude by reminding my fellow Sen- 
ators that we have been hearing much 
in recent days about the necessity of 
American industries being able to com- 
pete at home and abroad. We need leg- 
islation which will aid the business 
community and foster an atmosphere 
of competition and growth, unfortu- 
nately S. 430 will do neither. There- 







28350 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



fore, I must express my opposition to 
S. 430. 

Mr. METZENBAUM. Mr. President, 
I rise to address myself to the amend- 
ment offered somewhat out of place, 
but I understand the procedure and I 
find no fault with it, having to do with 
the common-law liability as pertains 
to the manufacture of airplanes. That 
amendment has been offered as a 
second-degree amendment to the 
pending amendment. 

What is being asked is that we abro- 
gate the well-established common-law 
product liability standards for one par- 
ticular industry, the manufacturers of 
planes that seat 20 or fewer passen- 
gers. 

This amendment would make radical 
changes in the tort laws of many 
States. It would make it extremely dif- 
ficult for someone injured in a small 
plane accident to obtain compensa- 
tion. 

When this legislation came before 
the Senate Judiciary Committee a few 
months ago, I said at the time that I 
was deeply troubled by the argument 
that Congress is more capable of craft- 
ing fair and balanced tort laws than 
are the States, which have established 
these policies over the history of this 
country. 

There is a real State's rights issue 
here and that State's rights issue is: 
are we going to make the laws having 
to do with tort liability of airplane 
manufacturers or are the States going 
to make them as they have been 
doing? 

Not only have State legislatures and 
State courts developed tort laws, they 
have been active in continuing to 
review and reform them. In the last 
few years, over 40 States have enacted 
some type of tort reform laws bearing 
on the issues raised by this amend- 
ment. 

Is Congress really more expert in 
drafting these laws than the States? I 
do not think so. We are talking about 
the right to sue the manufacturer of 
an airplane. 

But the general aviation industry is 
up here saying it needs this legislation 
to survive. 

I do not question the fact that the 
industry is in a slump and that liabil- 
ity insurance rates are up. 

But I want to say maybe you ought 
to take a look and see why the liability 
insurance rates are up and whether it 
has to do with the fact that the liabil- 
ity insurance companies and other in- 
surance companies are exempt from 
the antitrust laws of this country. 

Someday when this Congress has 
the temerity and the courage to move 
forward and repeal the McCarran-Per- 
guson Act that provides an exemption 
from the antitrust laws for the insur- 
ance industry, maybe then there will 
be a better answer to the airplane 
manufacturers than this proposed leg- 
islation. 



The question is, is there a causal 
link between the rising liability costs 
and a turndown in the sale of planes? 
Is there enough of a link to justify 
placing gross restrictions on the rights 
of injured parties to sue in general 
aviation accidents? 

The answer is no, unequivocally no. 

Their booming sales during the late 
1970's saturated the market. The fact 
is that many of these 9-, 10-, and 11- 
year-old planes are still operating. And 
that is a big reason why sales of new 
planes are down. 

When there are enough planes out 
there and nobody needs new ones, and 
the American manufacturers build 
their planes well, therefore, people do 
not want to replace them. But why 
should we here in the U.S. Congress 
bail out this particular industry be- 
cause it had that which some might 
say the "misfortune" of selling too 
many planes several years ago? It was 
not a misfortune. I am glad it is a 
viable, strong industry. But this is the 
worst case of Government interference 
in the marketplace to come along and 
say they are having some troubles; 
therefore, we should provide some 
changes in the applicable tort law to 
the airplane manufacturers. 

The owners, the pilots, and manu- 
factuers of general aviation aircraft 
have banded together to push this leg- 
islation because they believe it will 
solve some of the economic woes of 
this industry. 

Let us talk about the economic woes 
of this industry. It comes about from 
increased foreign competition. It 
comes about from the profusion of 
high quality, lower cost, older aircraft 
on the market and they claim that it 
comes about by reason of these expen- 
sive liability insurance premiums. 

But it is still dead wrong for Con- 
gress to go along with these special in- 
terest groups and adopt a proposal 
that is so unfair to injured passengers. 

The injured passenger, or the pas- 
senger who possibly may be deceased 
and therefore his or her family, why 
should that person or that family be 
asked to suffer because the Congress 
decided that the manufacturer would 
no longer have liability? 

This amendment is bad policy. It un- 
dercuts the doctrine of liability and re- 
places with negligence-based Federal 
standards. It expands the defense 
available to manufacturers to block 
cases brought against them by injured 
victims and their families. It limits the 
application of joint and several liabil- 
ity and arbitrarily cuts off recoveries 
for injuries caused by aircraft more 
than 20 years old. 

Now, if the aircraft caused the 
injury, the mere fact that it was man- 
ufactured 20 years ago— if there was a 
defect and that is what caused the 
injury— why should that passenger, 
why should that pilot not have a right 
to bring an action against the manu- 



facturer? There is no logical reason for 
that. 

And if we were to pass this amend- 
ment, it would severely curtail the 
rights which passengers on private 
and chartered aircraft possess under 
current State law. 

Consider the 20 years statute of 
repose contained in the amendment. 
Under the amendment's language, 
someone who was injured in a general 
aviation accident could not even initi- 
ate a claim for compensation if the ac- 
cident involved an aircraft or its com- 
ponents which was more than 20 years 
old. It would not matter how defective 
the aircraft was. You would just be 
out of luck if the plane was more than 
20 years old. 

That limit bears no relation to the 
useful safe life of general aviation air- 
craft. Some of the planes flying today 
are at least 40 years old. 

Under this amendment, a victim 
would be required to prove that a 
plane "was in a defective condition un- 
reasonably dangerous for its intended 
purpose, according to engineering and 
manufacturing practices which were 
reasonably feasible at the time the 
product left the control of the manu- 
facturer." 

How would you possibly prove what 
was reasonably feasible 20 or 30 or 35 
years ago? That would not only be an 
extremely difficult new hurdle, but it 
would practically be impossible. The 
victim— the party without the exper- 
tise—would have the burden of prov- 
ing if engineering and manufacturing 
practices were feasible at the time the 
plane was made. 

The amendment bars recovery if the 
aircraft was not used for a purpose for 
which it was designed. This language 
could stop victims from recovering 
anything from airplane manufactur- 
ers. The amendment would allow man- 
ufacturers to argue that a plane was 
not intended to crash— of course— even 
though the situation may have been 
inevitable and forseeable. 

Do not worry about safety. Do not 
worry about trying to make a plane 
crashworthy. You are not going to be 
liable because of this loophole in the 
amendment. 

And there is more. 

The amendment would limit joint 
and several liability unless the defect 
is a part of the original part of the 
design or there has been defective as- 
sembly; otherwise, liability is based on 
the responsibility attributable to the 
defendant. What this means, simply 
stated, is that a victim in a crash could 
be left undercompensated for his or 
her injury. If, for example, a manufac- 
turer was held to be 50 percent respon- 
sible but the pilot was insolvent, the 
victim would only get that 50 percent. 
Now, would anybody argue that is 
fair? 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28351 



Mr. President, the Senate must ask 
itself three questions: One is, is it ap- 
propriate to have this airplane liabil- 
ity amendment attached to a bill 
which is attempting to protect the 
consumers of this Nation so that they 
may go out and buy products at a dis- 
count? 

The second question is, do we really 
want to leave passengers without ade- 
quate compensation? 

Third, the question is, do we want to 
relax liability standards and thereby 
weaken incentives to design and manu- 
facture safe aircraft? 

The answer to all of these questions 
should be a loud, clear and unequivo- 
cal no. 

As Consumers Union, the Consumer 
Federation of America, U.S. PIRG, 
and Public Citizen noted in a Septem- 
ber 15, 1988 letter to all Senators, a 
letter just sent within the last several 
weeks: 

We oppose this legislation because we fear 
its efects on the legal rights of injured pas- 
sengers and on aviation safety. This legisla- 
tion would make it exceedingly difficult, if 
not impossible in many cases, for innocent 
passengers and their families to receive ade- 
quate compensation for the horrendous in- 
juries and deaths associated with general 
aviation air crashes. 

This special interest legislation must 
be defeated. 

Mr. President, I want to point out 
something about this amendment. My 
opinion is that this amendment might 
actually carry if it were let to go to a 
vote, which I do not intend to do. 

But let me tell you why it might 
carry. Because the lobbyists are down 
here working the Halls of this body; 
because the lobbyists have been 
around saying they want this. And 
there is no lobbyists, there is nobody 
there for the public interest. There is 
nobody concerned about the passen- 
gers on the plane. They do not have 
lobbyists. They do not know if they 
are going to be flying in a plane that is 
defective or that will not work or that 
is not crashworthy. So they have no 
lobbyists. 

So the lobbyists who are represent- 
ing the airplane manufacturers have 
done a fine job of lining up support 
for this kind of amendment. But that 
does not make it right. In fact, it is un- 
equivocally, undeniably wrong. We are 
not going to pass this amendment and 
we should not pass this amendment. 
And, even if it were to be adopted, my 
guess is that those who are filibuster- 
ing the basic bill would continue to do 
so. 

Mr. President, I yield the floor. 

Mrs. KASSEBAUM. Mr. President, 
my good friend from Ohio knows 
better than to make some of the state- 
ments that he made. I would start 
with one that he mentioned last, the 
fact that there are no lobbyists repre- 
senting the other side on this case. 

I know of no stronger lobby, Mr. 
President, than the Trial Lawyers As- 



sociation, which has so successfully 
rallied their troops in order to keep 
this legislation from ever receiving an 
up-or-down vote on the Senate floor. 
And I think that is a travesty. 

I would also like to state that the 
Senator from Ohio stated that there 
were gross restrictions in this amend- 
ment. They are not gross restrictions. 
No one is prevented from bringing a 
lawsuit. There are no caps on dam- 
ages. 

What it does do, what I have stated, 
is that it will allow greater predictabil- 
ity. No one's right to sue is limited. 
Awards are not, as I say, in any way 
capped. Those are just two basic state- 
ments that I think should be very 
clear to everyone in understanding 
this. 

I can understand those who have 
concerns about tort reform and who 
view this as the camel's nose under the 
tent to the larger issue of product li- 
ability—they have grave concerns. But 
this is a very different issue, Mr. Presi- 
dent, because aviation is so tightly reg- 
ulated by Federal standards that I 
think it comes under a totally differ- 
ent section when we are talking about 
tort reform and liability. And because 
it has to meet all those Federal stand- 
ards, I feel strongly that this is a very 
logical progression, in which we 
should have the predictability and uni- 
formity that would be an asset to the 
industry. And that is why we should 
have it in Federal court. To me it is a 
sound and sensible and sane approach 
to a very serious condition in our gen- 
eral aviation industry. 

It is not the special interests of our 
manufacturers. It is a question of jobs. 
It is a question of competitiveness. 
And a whole segment of our economy 
in which the United States has been a 
leader is being lost to us. 

At this point, Mr. President, I yield 
for some comments to the Senator 
from Arizona. 

Mr. McCAIN. Thank you, Mr. Presi- 
dent. We are talking about a very seri- 
ous issue here but I would like to 
thank my colleague from Ohio for in- 
jecting some humor into this debate. 

One of the most amusing statements 
I have heard here is that there is no 
one lobbying in favor of those poor 
victims of air crashes. All of us know 
very well that perhaps the most pow- 
erful single lobby in America today is 
the American Trial Lawyers Associa- 
tion, which has basically become re- 
sponsible for the death of an industry 
in this country. 

Mr. President, if you think I am ex- 
aggerating, look at the figures of gen- 
eral aviation manufacturing in Amer- 
ica today. About 10 to 15 years ago, 
general aviation in this country was 
manufacturing thousands of aircraft. 
Names like Beech and Piper and 
Cessna and so many others that have 
become part of the lexicon of Ameri- 
can aviation lore are now either bank- 



rupt or about to go out of business. 
And they can account that primarily 
to the skyrocketing costs of these in- 
credible judgments that are going on 
day to day. So I do thank my friend 
from Ohio for injecting some humor 
into this debate. 

Let me go back and say I have the 
utmost respect, admiration, and appre- 
ciation for the gentlelady from 
Kansas, who has pursued this legisla- 
tion now for several years. As a 
member of the Aviation Subcommittee 
she has been heavily involved in this 
issue. I know of no one in America 
who is more qualified to address both 
sides of this issue than my friend, Mrs. 
Kassebaum. 

Let me start out with a brief anec- 
dote. This took place about 1 year ago 
in the course of deliberations over an- 
other bill on the part of the Aviation 
Subcommittee, Mr. Chairman. One of 
the witnesses before the Aviation Sub- 
committee was Mr. Frank Borman. 

All of us know Frank Borman was a 
distinguished Air Force pilot, an astro- 
naut, and later president of Eastern 
Airlines. At the conclusion of his testi- 
mony, one of the members of the com- 
mittee asked Mr. Borman if he had 
any further concerns or issues that he 
would like to address to the commit- 
tee. And he said, "Yes, there is one." 
He said to the members of the com- 
mittee that since he had left Eastern 
Airlines he had had the opportunity to 
get back into general aviation, and he 
traveled around the country, and New 
Mexico in particular, to various air- 
ports. He was struck by the virtual dis- 
appearance of general aviation in air- 
fields, throughout the country. 

Mr. President, no longer are young 
Americans able to learn to fly planes 
in this country as we did for many 
generations. Frankly, that has pro- 
found implications. It has implications 
on our ability to recruit and train mili- 
tary pilots; it has implications on our 
ability to have qualified and experi- 
enced airline pilots. More and more of 
our commercial airlines are drawing 
their pool of qualified pilots from gen- 
eral aviation. Frankly, Mr. President, 
over time it is going to affect aviation 
safety, because no longer can young 
men and women in America afford to 
learn to fly. 

They cannot afford to learn to fly 
because the costs, judgments, settle- 
ments, and defense costs incurred by 
the industry have skyrocketed from 
$24 million in 1977 to $209 million in 
1985. 

I greatly appreciate the concern of 
my friend from Ohio for the consumer 
and concern for the people who fall 
victim to an air tragedy, which hap- 
pens all too often. Even though gener- 
al aviation accident rates have contin- 
ued to improve and the number of 
claims have remained constant, we see 
this dramatic increase in costs for 












28352 

judgments, settlements, and defense 
costs 

This situation, Mr. President, is very 
anecdotal. One of my favorite anec- 
dotes is the court settlement in the 
State of Texas which is an argument 
for my friend's legislation, making 
Federal standards as far as liability 
standards are concerned. It was the 
case of a family who died in a small 
aircraft accident and the jury award- 
ed, among many other millions of dol- 
lars, $2.5 million for preimpact 
trauma— preimpact trauma. 

Do you know what that means, Mr. 
President? It means that they were 
frightened before the airplane hit the 
ground and they were killed. 

We all know that that is ludicrous. 
What is happening with judges and 
juries around this country is outra- 
geous. It is not the fact that we would 
mind compensating victims of an air 
crash. Certainly we want to. And there 
is nothing in this legislation which will 
prevent just and equitable awards to 
victims of any air tragedy. 

The fact is, what this legislation 
does is set up Federal standards. I find 
it hard to understand why it would be 
opposed by anyone. Just briefly, Mr. 
President, this bill would establish ju- 
risdiction in Federal courts and would 
establish standards for liability for air- 
frame and component manufacturers 
based only on the following causes of 
action: negligence, defective products, 
failure to warn of known dangers, and 
breach of express warranty. It would 
require damages to be allocated based 
on comparative responsibility but hold 
general manufacturers of aircraft and 
components jointly liable and several- 
ly liable with other manufacturers, 
and allow claims for punitive damages 
only if a claimant first shows evidence 
of a conscious, flagrant indifference to 
the safety of others. It establishes a 2- 
year statute of limitations and a 20- 
year statute for aircraft and replace- 
ment parts. 

Let me address that particular 
aspect. If I should happen to get into a 
Stearman, which was made prior to 
World War II, and that airplane 
should crash, the manufacturers of 
that airplane are still liable for any- 
thing that happens with that airplane, 
even if a part was not originally manu- 
factured nor placed in the airplane at 
the time of manufacture. It seems to 
me that that is a pretty outrageous set 
of circumstances. I do not think it is 
unreasonable to establish a 2-year 
statute of limitations and a 20-year 
statute of repose for aircraft and re- 
placement parts. It permits recovery 
of attorney's fees by plaintiffs and de- 
fendants in case of frivolous suits, mo- 
tions, et cetera. We all know how 
clogged the courts are in America 
today. 

Let me emphasize what this legisla- 
tion does not do. It does not cap any 
damages. There is no cap on any dam- 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



ages that a jury might choose to 
impose. It does not impose any restric- 
tions on attorneys' fees. Our friends 
from the American Trial Lawyers As- 
sociation should be pleased to know 
that. I would like to repeat that again 
for the record. It does not impose any 
restrictions on attorneys' fees, includ- 
ing contingency fees. 

It does not waive responsibility to 
supply warning against dangers, re- 
gardless of the age of the product. And 
it does not affect the rights of persons 
who are injured on the ground or 
affect other more general areas of 
product liability law. 

Mr. President, the situation is grave. 
We are in danger of losing an industry 
in this country. We are losing our abil- 
ity to compete with foreign manufac- 
turers of general aircraft. 

When you look at the trade deficit 
and the problems that we are having 
with our trade and look at the way the 
general aviation business is being 
taken over by foreign manufacturers, 
it should give us all pause. 

A December 8, 1986, report from the 
United States Foreign Commercial 
Services staff in Switzerland provides 
an interesting trade perspective. 
"United States-made single-engine air- 
craft, especially at present exchange 
rates, would find a ready market in 
Switzerland as nearly half of the exist- 
ing fleet will have to be replaced 
within the next 2 to 5 years. However, 
the present high cost of the U.S. prod- 
uct liability insurance makes most U.S. 
small aircraft uncompetitive." 

That should not surprise anyone. It 
will inevitably take its toll, I think, in 
the U.S. market as well. 

Cessna Aircraft, for example, has 
been building aircraft as long as any- 
body in the aviation community can 
remember. Cessna Aircraft, the 
world's largest general aviation manu- 
facturer, has suspended production of 
all piston aircraft engines through the 
1987 model year. Piper Aircraft has 
stated that it may be forced to manu- 
facture only one piston engine air- 
craft, and Beech Aircraft has cut back 
its production significantly. No train- 
ing aircraft are being made in the 
United States. 

As foreign manufacturers move in to 
fill this near vacuum in domestic air- 
plane supplies, the U.S. industry's neg- 
ative trade balance will likely increase. 
Mr. President, it was in the United 
States that the Wright brothers flew 
at Kitty Hawk. It is in the United 
States that the first jet aircraft was 
flown. It is the United States that had 
the first major jet commercial aircraft. 
What are we going to see in the next 5 
or 10 years? Mr. President, we are 
going to see the disappearance of gen- 
eral aviation in America as we know it 
unless we adopt a reasonable standard 
as embodied in this bill proposed by 
my colleague from Kansas. 



I would also like to point out that I 
think that it is wrong to block a vote 
on this bill. I think it is wrong for my 
friend from Ohio to say that he is not 
going to allow this body to vote on this 
piece of legislation. My colleague from 
Kansas has proposed this legislation 
in a variety of fashions. It has received 
a majority support of the members of 
our committee. I think we deserve a 
vote. 

Mr. METZENBAUM. Will my friend 
from Arizona yield for a question? 

Mr. McCAIN. I will be glad to yield 
to my friend for a question. 

Mr. METZENBAUM. Does the Sena- 
tor think that if we had a vote on this, 
the Senator from Ohio could then be 
assured that all those persons over on 
that side of the aisle would permit us 
to have a vote on the basic bill that is 
pending before us, the resale price 
maintenance bill? It is my understand- 
ing that I am going to have a very dif- 
ficult time getting that to a vote. 

Mr. McCAIN. I will be glad to join 
with my friend from Ohio in seeking 
the assistance and, indeed, the coop- 
eration of the Members on this side of 
the aisle. I hope that my friend from 
Ohio does not somehow feel that that 
relieves him of the obligation of allow- 
ing a vote on this bill, nor does it make 
it right to block a vote on this bill. 
Two vote blockages do not make a 
right. 

Mr. METZENBAUM. The fact is 
that this amendment does not belong 
on this bill. It has nothing at all to do 
with the issue of resale price mainte- 
nance, and I think it is a vain attempt 
to put it on and only confuses the 
issue. It may alienate some and add 
some by putting it on, but I suppose 
the Senator from Kansas would be 
prepared to say, and I would agree 
with her, that I have not indicated a 
willingness for this measure to come 
to a vote on any other bill or a sepa- 
rate standing bill because I think it is 
just bad legislation. I yield the floor. 

Mr. McCAIN. I thank the Senator 
for yielding back to me. I would like to 
thank my colleague from Ohio for 
stating that one of his objections is 
that this amendment does not belong 
on this bill. I seem to recollect in the 
very short time I have been here and 
the 4 years I was in the House of Rep- 
resentatives, my friend and respected 
colleague from Ohio has a great pro- 
clivity for putting amendments on 
bills that really do not belong on those 
bills. Many people, myself, included, 
have admired his parliamentary skill 
tactics in that fashion. 

Mr. METZENBAUM. If the Senator 
from Arizona will yield to me without 
losing his right to the floor, I say that 
I have more difficulty with those who 
add amendments than I do about put- 
ting on the amendments. It had been 
more of a problem for me when I saw 
all those Christmas tree amendments 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28353 



that were put on various and sundry 
bills. I guess on the scorecard, I prob- 
ably objected to more extraneous 
amendments being added than I have 
been involved in myself of adding 
them on. 

Let us be realistic. We operate by 
the rules of the Senate. The lady from 
Kansas is not violating any of the 
rules in offering this amendment. The 
Senator from Ohio was not violating 
any rules in seeing to it that it not 
come to a vote, and the Senator from 
South Carolina is not violating any 
rules in seeing to it that the basic bill 
not come to a vote. I think I under- 
stand him clearly and loudly that he 
does not intend to permit the basic bill 
to come to a vote. 

Mr. McCAIN. If I might respond to 
my friend from Ohio, let me say I was 
expressing my admiration for his con- 
sonant parliamentary skills. I would 
say his record is replete with both ob- 
jecting to amendments as well as a siz- 
able record of addition of amend- 
ments. I certainly tip my hat to him 
for those skills. 

I also would like to point out to my 
friend from Ohio in a moment of seri- 
ousness, and I understand the rules we 
are playing by here, but this really is a 
serious situation that we are facing as 
far as the general aviation industry in 
America is concerned. 

I have the greatest respect and ad- 
miration for my colleague from 
Kansas, who has committed herself to 
a thorough debate on this issue. I am 
convinced that it is the only way we 
are ever going to get this legislation to 
a vote, which I think the American 
people deserve. 

I would like to yield to the Senator 
from Kansas, if I might. 

The PRESIDING OFFICER. The 
Senator from Kentucky. 

Mr. FORD. If people were listening 
to what has been said here this after- 
noon as it relates to the general avia- 
tion product liability amendment that 
has been submitted by the distin- 
guished and articulate Senator from 
Kansas, I doubt seriously that we 
would find very many who would vote 
against this amendment were it al- 
lowed to become an item that we could 
finally vote on. 

Let us look a little bit at what has 
been said by the distinguished Sena- 
tors from Kansas and Arizona. 

I am amazed at the eloquence and 
the recall of the Senator from Arizona 
as he talks about the first— and he 
wants to be in the position of saying 
America is first, a first in all things. It 
is very difficult because of what we do 
to our manufacturers, what we do to 
those people who work for those man- 
ufacturers and how we continue to 
impose restrictions on our people so 
our people lose jobs so our jobs are 
transferred overseas. 

Since 1980, if my figures are right— I 
am sure they are not far off— but in 



the aviation construction industry, 70 
percent of the jobs have been lost. 
Think about that. How does that help 
the consumer when the consumer does 
not have a job, he does not buy any- 
thing? What do we do? We send his or 
her job overseas. They manufacture 
the airplanes and they send them back 
over here. They are not in the position 
to have the same responsibility we 
have imposed upon our industry. So it 
becomes somewhat more of an emo- 
tional issue with me than it does a 
technical amendment. 

The reason it becomes an emotional 
issue with me is because I see Ameri- 
cans losing jobs; I see Americans slip- 
ping from No. 1 to whatever the other 
countries want to manufacture and 
send over here in an open-door trade 
policy. 

As the distinguished Senator from 
Kansas, Senator Kassebaum, said, this 
is not a domestic issue. This is not a 
domestic issue. The harm it causes, as 
she said and I quote from her state- 
ment, "is reflected in general aviation 
trading figures." 

Let us look at the past and let us 
look at the future. "Prior to 1981," she 
said, "U.S. general aviation exports 
contributed multimillion dollar sur- 
pluses to our Nation's balance of 
trade." 

That is an industry of which we are 
all proud. 

"In 1981, and ever since then," she 
states— and I accept it because I 
chaired the hearing— "the U.S. general 
aviation industry has suffered signifi- 
cant trade deficits, contributing to our 
national trade deficit, which has 
become a matter of grave concern." 

Why should we not help ourselves 
for a change instead of helping them? 
Why should we not help our people to 
have jobs? Why should we not help 
our industry to build and improve and 
do better? 

Foreign manufacturers are the big 
winners in what we are not doing, not 
allowing this amendment to come to a 
vote— putting the amendment, the dis- 
tinguished Senator from Ohio says, 
goodness gracious, on this bill. Well, 
why not this bill? What other vehicle 
is out there? Why not play by the 
rules? Why be criticized for playing by 
the rules? 

If I recall correctly, in the hearing 
we had an attorney who represented a 
client who received a great deal of 
money, maybe one of the largest set- 
tlements, if not the largest, and he 
came very close to agreeing with the 
committee, with Senator Kassebaum's 
position. Boy, I understand he was 
chastised significantly because he was 
agreeing with what was basically 
right. The distinguished Senator from 
Arizona said there is no cap, we have 
not placed a cap on any damages or 
imposed any restrictions on lawyers' 
contingency fees. 



We need good lawyers every once in 
a while. My dad told me a long time 
ago, "Son, a little knowledge of the 
law is dangerous. Get you a good 
lawyer and stay with him." 

I like lawyers. I have nothing against 
lawyers. They are important. They 
play a vital role in the system. I am 
for trial lawyers. I am for corporate 
lawyers. I am for general lawyers or 
whatever. I think I have supported 
them most of the time I have been 
here. But this is where I have to slip 
off the edge a little bit to support 
those people who are now not work- 
ing, where we are slipping from No. 1 
and other countries are shipping their 
airplanes in here and we are buying 
them because the price is less. Why? 
Because they do not have the liability 
our manufacturers are required to 
bear. So if we lose our production and 
get their production, what have the 
trial lawyers or any lawyer gained? 
They will wear out one of these days. 
They are bound to quit. But if you put 
in a new part that extends the life of 
the plane, then the manufacturer of 
the part has to take the liability. 

So, Mr. President, I am very con- 
cerned that we will watch this amend- 
ment die because some do not want it. 
We are not going to have it. We are 
going to play by the rules. We are 
going to filibuster. 

Let me say that those who want to 
prevent this amendment from coming 
up are making foreign manufacturers 
the big winners and saying to Ameri- 
can manufacturers, "You are the 
losers." We can be big, brave defenders 
of the consumer, we can do all these 
things for the little people, but we say 
that 70 percent of the employees are 
now out of work— a reduction by 70 
percent in the last 8 years. The foreign 
manufacturers stand to be the big win- 
ners and American manufacturers 
stand to be the big losers. 

There will be a larger percentage of 
foreign aircraft in service in the 
United States as time progresses and 
their considerably lower liability risk 
means a competitive advantage for 
foreign manufacturers. 

I wish there was some way I could be 
more persuasive. I wish there was 
some way I could reach out and say to 
the manufacturers we want to help 
you expand your operation, get back 
in competition, begin to hire more 
people, improve the economic condi- 
tions in the communities, improve 
their income sufficient so they can 
send their children to school and have 
hope. What we are doing is saying for 
the first time in my life— and I will 
soon be 65; I do not mind admitting 
it— is that my grandchildren will not 
have the same opportunity as my chil- 
dren, nor the same opportunity I had 
in this great country because we are 
beginning to squeeze to the point 
where their opportunities are not as 









28354 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



bright and a great percentage worse 
than their parents. 

So we have the opportunity to say 
that we want to be first again, we want 
to put our manufacturers in the place 
where they can be competitive and 
where the people in this country buy 
our product. 

I admire the Senator from Kansas, 
Mrs. Kassebaum, for taking the oppor- 
tunity to make this bill an amendment 
to S. 430. I think she is right. Around 
here you stand up for what you think 
is right. 

You may not win as far as votes are 
concerned, but you sure do sleep a lot 
better at night. 

Mr. President, I do thank the distin- 
guished Senator from South Carolina 
for allowing me this time, and I en- 
courage the Senator from Kansas to 
be a little stubborn, do what she 
thinks is right. There will be one or 
two Senators around here who will 
support her, and if they will not let 
her amendment come to a vote prob- 
ably nothing else will come to a vote 
around here. 

You can always play the game both 
ways. It is always two-sided. 

I admire the distinguished Senator 
from Ohio. He has a great reputation 
around here for being the watchdog. 
In fact, he is the only Senator I know 
who has been given a title. There is 
the majority leader, the minority 
leader, and the commissioner. The 
commissioner watches over every- 
thing, and the commissioner gets us in 
a spot when there is very little time 
left and we get threatened with a fili- 
buster or we get threatened with this. 
These threats are not idle and he has 
taught us a few lessons. He has kept 
me here all night, long nights, long 
days. But I want to tell you the time 
comes where my memory is not as 
good as it used to be, my memory is 
fading for those long nights, and I say 
to the commissioner it may be the 
time when we start another long 
night, it may be a time that we begin 
to talk about things and do what we 
feel is right. 

So the threat of a filibuster or talk- 
ing or not allowing it to become law 
does not bother me as much as it used 
to because they say, as the Senator 
from South Carolina, "You were a 
pretty good Governor." 

And I say that in time and distance 
it might look a lot better. So time and 
distance has faded a little bit, and also 
the worry about a filibuster pushing 
us back against the wall at the end of 
the session. 

Let me tell a story here, if I may. 
They say this is off on something, the 
institution is not working right, the 
rules do not help us any, and all that 
kind of stuff. I was campaigning down 
in western Kentucky in a county, and 
I was at the county seat. I was shaking 
hands with whittlers around the 
courthouse. I was telling who I was, 



what I was running for, and I would 
appreciate their vote. This one 
fellow— after I had gone through that, 
I tried to make a little idle conversa- 
tion with him. And I said, "It certainly 
is hot, isn't it?" 

He said, "Yep; but it happens about 
this time every year." 

So what we see here happens just 
about this time every session. And it is 
not something new after 14 years. I 
have experienced it. Our distinguished 
majority leader is here. He has experi- 
enced it. Others have been here. We 
experience it. So we figure it is going 
to happen. So if it is going to happen, 
let it happen. 

I am willing to stay here and try to 
help the Senator from Kansas with 
this amendment, if she can, regardless 
of those who say that we may not be 
able to bring it up. We might be able 
to work out a little something, a little 
agreement. I understand the Senator 
from Ohio. I come from Kentucky, the 
land of Henry Clay, "The Great Com- 
promiser." And I do not intend to 
leave the table without a few at- 
tempts. 
I yield the floor. 

Mr. METZENBAUM. Mr. President, 
I want to say to my good friend from 
Kentucky that sometimes it takes a 
filibuster to beat a filibuster. It so 
happens we are engaged in a filibuster. 
My good friend from South Carolina 
over here is filibustering the basic un- 
derlying bill. I think if we stay here 
about 7 days or 7 weeks he would not 
let me bring this bill to a vote. What 
we have at the moment is the distin- 
guished Senator from Kansas offered 
an amendment. And it so happened I 
do not think that amendment ought 
to come to a vote. But even if it came 
to a vote, even if she prevailed, that 
would never become law because it is 
attached to the underlying bill which 
the Senator from South Carolina 
makes no bones about. He does not 
intend to let us go to a vote on that 
subject. 

Mr. FORD. Will the Senator from 
Ohio yield for a question? 
Mr. METZENBAUM. Surely. 
Mr. FORD. Under those circum- 
stances, then, when the Senator is 
saying the distinguished Senator from 
South Carolina is conducting a filibus- 
ter against the Senator's bill, the one 
that he feels very strongly about, and 
this amendment is not going anywhere 
because of the filibuster, it might be 
nice and accommodating if the Sena- 
tor would allow the Senator from 
Kansas to have her vote. 

That would do two things: One, the 
Senator would be accommodating, and 
we would see if there is support for 
this amendment or not. And then, if it 
is not going anywhere, what does the 
Senator have to lose? It is not much 
for the Senator to lose to allow her 
amendment to come to a vote if the 



bill is not going to pass. At least this is 
the only vehicle we can have. 

The Senator is saying— I can see the 
wheels turning now— she might per- 
suade the Senator from South Caroli- 
na to let this bill go. So I know. Would 
it not be nice to just go ahead and let 
us vote on this amendment tomorrow? 

Mr. METZENBAUM. That is a won- 
derful thought, and I certainly am 
going to sleep on that subject, but I 
doubt very much it will change my 
mind. But I will try to get a good rest. 
I will watch the debate tonight. Right 
after that I am going to cogitate about 
this matter. 

Mr. FORD. I will be up also. If the 
Senator needs to cogitate with a 
friend, call me. 

Mr. METZENBAUM. I thank the 
Senator from Kentucky. 



THE RETAIL COMPETITION 
ENFORCEMENT ACT OF 1988 

Mr. SIMON. Mr. President, today I 
commend my colleagues in the Senate 
for bringing to the floor once again for 
consideration S. 430, the Retail Com- 
petition Enforcement Act of 1988, 
which I originally cosponsored along 
with Senator Metzenbaum, Senator 
Bradley, and Senator Rudman. This 
measure will restore the legal protec- 
tions that the Nation's antitrust laws 
traditionally have afforded to the 
practice of discounting by codifying 
the 75-year-old rule that vertical price 
fixing is per se illegal. Such action will 
be of primary benefit to consumers 
who wish to continue to buy goods at a 
discount. The savings that are 
achieved through discounting prac- 
tices are enormous. In 1983, it was esti- 
mated—conservatively—that discount- 
ing saved the American people ap- 
proximately $23 billion per year. Price 
survey after price survey documents 
that pricecutters save consumers 
many of their hard-earned dollars. 

I urge my colleagues to take swift 
action in passing the bill with no unfa- 
vorable amendments. This is an impor- 
tant measure for consumers who wish 
to save their families' money by seek- 
ing the best possible price. This bill 
stands for the consumer and against 
higher prices and for the independ- 
ence of the business person against 
fixed prices. It is a good bill that de- 
serves to be passed expeditiously, and 
I urge my colleagues to do so. 

The PRESIDING OFFICER (Mr. 
Reid). The Senator from South Caroli- 
na has the floor. 

Mr. THURMOND. Mr. President, I 
see the majority leader on the floor. I 
wanted to ask if he wishes to make a 
statement. 

Mr. BYRD. Yes. 

Mr. THURMOND. I yield to him 
without losing my right to the floor. 

The PRESIDING OFFICER. The 
majority leader. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28355 



ORDER OF PROCEDURE 
Mr. BYRD. Mr. President, I am pre- 
pared to put the Senate over until to- 
morrow. And I ask for the regular 
order. 



PARENTAL AND TEMPORARY 
MEDICAL LEAVE 

The PRESIDING OFFICER. The 
clerk will report. 

The assistant legislative clerk read 
as follows: 

A bill (S. 2488) to grant employees paren- 
tal and temporary medical leave under cer- 
tain circumstances, and for other purposes. 

The Senate continued with the con- 
sideration of the bill. 



ORDER OF PROCEDURE 

Mr. BYRD. Mr. President, I am 
going to offer a cloture motion. I had 
indicated to the Republican leader 
that was my plan. I will be happy to 
wait. The leader is busy right now. He 
is tied up. I do not believe I would be 
showing any discourtesy if I went 
ahead and offered it. But I will offer it 
momentarily. 

In the meantime, I will ask unani- 
mous consent that there be a period 
for morning business, that that period 
not extend beyond 20 minutes, and 
that Senators may speak therein for 
not to exceed 5 minutes each. 

There will be a rollcall vote on the 
amendment that has already been or- 
dered. The Republican leader and I 
will determine the time of that vote 
momentarily. Before the Chair puts 
the request, I will offer the cloture 
motion. Is the parental leave bill still 
before the Senate? 

The PRESIDING OFFICER. The 
parental bill is before the Senate. 



CLOTURE MOTION 

Mr. BYRD. Mr. President, I send a 
cloture motion to the desk. 

The PRESIDING OFFICER. The 
cloture motion having been presented 
under rule XXII, the Chair, directs 
the clerk to read the motion. 

The assistant legislative clerk read 
as follows: 

CLOTURE MOTION 

We, the undersigned Senators, in accord- 
ance with the provisions of Rule XXII of 
the Standing Rules of the Senate, hereby 
move to bring to a close debate on the com- 
mittee substitute for the bill S. 2488, a bill 
to grant employees parental and temporary 
medical leave under certain circumstances, 
and for other purposes. 

Senators Brock Adams, John Kerry, 
Wyche Fowler, Jr., Carl Levin, Spark 
Matsunaga, Howard M. Metzenbaum, 
Jeff Bingaman, Claiborne Pell, Tom 
Daschle, Edward M. Kennedy, Alan 
Cranston, George J. Mitchell, Frank 
Lautenberg, Christopher Dodd, Bar- 
bara A. Mikulski, and Jay Rockefeller. 



ORDER OF PROCEDURE 

Mr. BYRD. Mr. President, I ask 
unanimous consent that I may with- 
draw that cloture motion if, when the 
Republican leader comes to the floor, 
he would for some reason not want me 
to offer it. But I think both of us un- 
derstand that was my plan. 

The PRESIDING OFFICER. With- 
out objection, the unanimous-consent 
request is agreed to. 



MORNING BUSINESS 

Mr. BYRD. Mr. President, I ask that 
we have morning business for not to 
exceed 20 minutes, and that Senators 
may speak therein for not to exceed 5 
minutes each. 

The PRESIDING OFFICER. With- 
out objection, that will be the order. 

Does the Senator from South Caroli- 
na seek recognition? 



A TRIBUTE TO SENATOR 
DANIEL J. EVANS 

Mr. THURMOND. Mr. President, 
the fast-approaching adjournment of 
this 100th session of Congress marks 
the retirement of Senator Daniel J. 
Evans from his post as U.S. Senator. 
As friends and colleagues of the distin- 
guished Senator from Washington, we 
are all sorry to witness his departure 
from the Senate. In honor of Senator 
Evans, I would like to take this oppor- 
tunity to discuss the many contribu- 
tions he has made to the Congress and 
to the people of the United States. 

Senator Evans has served the State 
of Washington in several capacities. 
Shortly after completing his studies at 
the University of Washington, Senator 
Evans served in the Washington State 
House of Representatives from 1956 to 
1964. Senator Evans held the office of 
Governor of Washington from 1965 to 
1977— he is the only three-term Gover- 
nor in the State's history. Senator 
Evans was appointed to the U.S. 
Senate by Gov. John Spellman on Sep- 
tember 12, 1983, to fill the seat of the 
late Senator Henry M. Jackson. He 
then won a special Senate election in 
November of the same year to serve 
the following term in full. 

During his term in the U.S. Senate, 
Senator Evans has achieved many im- 
portant goals. In particular, Senator 
Evans has concentrated his efforts on 
the Federal budget, energy issues, and 
natural resources. The independent 
appropriations bill, sponsored by Sena- 
tor Evans, would assure the separate 
passage of certain appropriations in 
order to speed the budgetary process. 
In general, Senator Evans has been a 
strong supporter of legislation de- 
signed to curb spending and decrease 
the deficit. 

As a member of the Senate Energy 
Committee, Senator Evans has taken a 
great interest in conservation legisla- 
tion. He was the original sponsor of 



the Appliance Efficiency Standards 
Act, setting higher requirements for 
the electrical appliance industry to 
produce more energy efficient prod- 
ucts. In an effort to maintain a strong 
defense posture, Senator Evans was in- 
strumental in ensuring the placement 
of the Hanford Reservation nuclear 
facility in his home State. 

Senator Evans has been actively in- 
volved in protecting the natural re- 
sources of Washington State. He spon- 
sored the Columbia River Gorge Bill, 
protecting the river gorge from prop- 
erty jurisdiction disputes and ensuring 
its preservation. Senator Evans has 
been instrumental in the establish- 
ment of wilderness preserves in Wash- 
ington. 

Senator Evans is a fine man, and he 
has represented the State of Washing- 
ton ably and honorably. It has been a 
pleasure to serve in the 100th Con- 
gress with my distinguished colleague 
from Washington, and I wish him the 
best in any and all future endeavors. 



A TRIBUTE TO SENATOR PAUL 
TRIBLE 

Mr. THURMOND. Mr. President, I 
rise today to pay tribute to my friend 
and colleague, Senator Paul Trible of 
Virginia, who will be ending his career 
in the U.S. Senate at the close of this 
100th session of Congress. 

Although still a young man, Senator 
Trible has compiled an impressive 
resume. Senator Trible is a graduate 
of Hampden-Sydney College and 
Washington and Lee University Law 
School. He served as an assistant U.S. 
Attorney and commonwealth attorney 
for Essex County, VA, and was then 
elected to the U.S. House of Repre- 
sentatives in 1976. After serving in the 
House, Senator Trible was elected to 
the U.S. Senate in 1982. 

Since that time, Senator Trible has 
worked hard to the benefit of Virgin- 
ians and Americans alike. Specifically, 
Senator Trible has been active in im- 
proving benefits for Federal employ- 
ees and veterans. In 1985, he offered 
the former military spouses amend- 
ment to the Department of Defense 
Authorization Act. This amendment 
guarantees benefits for the divorced 
spouses of military personnel. In addi- 
tion, Senator Trible has committed 
himself to the issue of child support. 
Senator Trible authored several key 
provisions of the 1984 Child Support 
Act, which improve interstate collec- 
tion procedures and provide for man- 
datory wage deductions in the case of 
delinquent child support payments. 

Senator Trible has sponsored legis- 
lation to keep pace with the fast- 
changing world of technology. He in- 
troduced the Computer Crime Act of 
1984, to prevent the use of computer 
technology to steal or tamper with 
Government data. 






28356 

On a personal note, Senator Trible 
is a man who holds the ideal of family 
in high esteem. When Senatorial 
duties become temporarily less press- 
ing, one can almost always find Sena- 
tor Trible with his lovely wife and 
children. This commitment to his 
family reflects the honorable charac- 
ter of Senator Paul Trible. 

Senator Trible is one of the finest 
and ablest Members of the U.S. 
Senate, and is held in high esteem and 
respect by his colleagues. He will be 
greatly missed by many of us in the 
Senate. 

I thank the distinguished Senator 
from Virginia for his fine contribu- 
tions to the U.S. Senate, and I wish 
him the best in all future endeavors. 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



MESSAGES PROM THE 
PRESIDENT 

Messages from the President of the 
United States were communicated to 
the Senate by Mr. Kalbaugh, one of 
his secretaries. 



EXECUTIVE MESSAGES 
REFERRED 

As in executive session, the Presid- 
ing Officer laid before the Senate mes- 
sages from the President of the United 
States submitting sundry nominations, 
which were referred to the appropri- 
ate committees. 

(The nominations received today are 
printed at the end of the Senate pro- 
ceedings.) 



REPORT ON MOTOR VEHICLE 
SAFETY— MESSAGE FROM THE 
PRESIDENT— PM 163 
The PRESIDING OFFICER laid 
before the Senate the following mes- 
sage from the President of the United 
States, together with an accompany- 
ing report; which was referred to the 
Committee on Commerce, Science, and 
Transportation: 

To the Congress of the United States: 

The Highway Safety Act and the 
National Traffic and Motor Vehicle 
Safety Act, both enacted in 1966, initi- 
ated a national effort to reduce traffic 
deaths and injuries and require annual 
reports on the administration of the 
Acts. This is the 20th year that these 
reports have been prepared for your 
review. 

The report on motor vehicle safety 
includes the annual reporting require- 
ment in Title I of the Motor Vehicle 
Information and Cost Savings Act of 
1972 (bumper standards). 

In the Highway Safety Acts of 1973, 
1976, and 1978, the Congress expressed 
its special interest in certain aspects of 
traffic safety that are addressed in the 
volume on highway safety. 

The national outrage against drunk 
drivers, combined with growing safety 
belt use and the voluntary cooperation 



we have received from all sectors of 
American life, has brought about even 
more improvements in traffic safety. 

In addition, despite large increases 
in the number of drivers and vehicles, 
the Federal standards and programs 
for motor vehicle and highway safety 
instituted since 1966 have contributed 
to a significant reduction in the fatali- 
ty rate per 100 million miles of travel. 
The rate decreased from 5.5 in the 
mid-60's to the 1986 level of 2.5 

The progress we have made is, of 
course, no consolation to the relatives 
and friends of those 46,056 people 
who, despite the safety advances and 
greater public awareness, lost their 
lives in 1986. But it is indicative of the 
positive trend this Administration has 
established to make our roads safer. 

During a time of economic prosperi- 
ty and lower gas prices, the loss of ap- 
proximately 126 lives per day on our 
Nation's highways is still too high. 
Also, with the increasing motor vehi- 
cle travel, we are faced with the threat 
of an even higher number of traffic fa- 
talities. Therefore, there is a continu- 
ing need for effective motor vehicle 
and highway safety programs. 

We will continue to pursue highway 
and motor vehicle safety programs 
that are most effective in reducing 
deaths and injuries. We are convinced 
that even during these times of fiscal 
austerity, significant progress in traf- 
fic safety can be achieved through the 
combined efforts of government, in- 
dustry, and the public. 

Ronald Reagan. 

The White House, October 5, 1988. 



PRESIDENTIAL APRPOVALS 

A message from the President of the 
United States announced that on Oc- 
tober 4, 1988, he had approved and 
signed the following enrolled bills: 

S. 1544. An act to amend the National 
Trials System Act to provide for coopera- 
tion with State and local governments for 
the improved management of certain Feder- 
al lands, and for other purposes. 

S. 1583. An act for the relief of Maria An- 
tonieta Heird. 

S. 1972. An act for the relief of Irma Pur- 
isch and Daniel Purisch. 

S. 2846. An act to provide for the award- 
ing of grants for the purchase of drugs used 
in the treatment of AIDS. 



MESSAGES FROM THE HOUSE 

At 10:04 a.m., a message from the 
House of Representatives, delivered by 
Mr. Hays, one of its reading clerks, an- 
nounced that the House has passed 
the following bills, in which it requests 
the concurrence of the Senate: 

H.R. 4146. An act to designate wilderness 
within Olympic National Park, Mount 
Rainer National Park, and North Cascades 
National Park Complex in the State of 
Washington, and for other purposes; 

H.R. 4210. An act to reauthorize title II of 
the Marine Protection, Research, and Sanc- 



tuaries Act of 1972, for fiscal years 1989 and 
1990, and for other purposes; 

H.R. 4211. An act to reauthorize the Na- 
tional Ocean Pollution Planning Act of 1978 
for fiscal years 1989 and 1990, and for other 
purposes; 

H.R. 4724. An act to direct the Secretary 
of Agriculture to release a reversionary in- 
terest of the United States in certain land 
located in Oktibbeha County, MS; 

H.R. 5199. An act to make nonmailable 
any plant, fruit, vegetable, or other matter, 
the movement of which in interstate com- 
merce has been prohibited or restricted by 
the Secretary of Agriculture in order to pre- 
vent the dissemination of dangerous plant 
diseases or pests, and for other purposes; 

H.R. 5280. An act to require the Secretary 
of the Treasury to mint coins in commemo- 
ration of the Bicentennial of the U.S. Con- 
gress; 

H.R. 5315. An act to amend the Congres- 
sional Award Act to extend the Congression- 
al Award Program; and 

H.R. 5318. An act to amend the Egg Re- 
search and Consumer Information Act to 
limit the total costs that may be incurred by 
the Egg Board in collecting producer assess- 
ments and having an administrative staff, to 
eliminate egg producer refunds, and to 
delay the conducting of any referendum by 
egg producers on the elimination of such re- 
funds. 

The message also announced that 
the House has agreed to the following 
concurrent resolutions, in which it re- 
quests the concurrence of the Senate: 
H. Con. Res. 115. A concurrent resolution 
providing for participation by delegations of 
Members of both Houses of Congress in 
ceremonies to be held in April 1989 in New 
York City marking the 200th anniversaries 
of the implementation of the Constitution 
as the form of government of the United 
States, the inauguration of President 
George Washington, and the proposal of 
the Bill of Rights as the first 10 amend- 
ments to the Constitution; and 

H. Con. Res. 331. A concurrent resolution 
to acknowledge the contribution of the Iro- 
quois Confederacy of Nations to the devel- 
opment of the U.S. Constitution and to reaf- 
firm the continuing government-to-govem- 
ment relationship between Indian tribes and 
the United States established in the Consti- 
tution. 

At 2:12 p.m., a message from the 
House of Representatives, delivered by 
Mr. Hays, one of its reading clerks, an- 
nounced that the House has passed 
the bill (S. 2100) to authorize the U.S. 
Army Corps of Engineers to construct 
various projects for improvements to 
rivers and harbors of the United 
States, and for other purposes, with 
an amendment; it insists upon its 
amendment to the bill, asks a confer- 
ence with the Senate on the disagree- 
ing votes of the two Houses thereon, 
and appoints the following as manag- 
ers of the conference on the part of 
the House: 

Mr. Anderson, Mr. Roe (except for section 
30) Mr. Nowak, Mr. Hammerschmidt, and 
Mr. Stangeland, and as an additional con- 
feree, for consideration solely of section 30 
as contained in the House amendments and 
modifications committed to conference, Mr. 
Borski. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28357 



The message also announced that 
the House has passed the bill (S. 2030) 
to amend the Marine Protection, Re- 
search, and Sanctuaries Act, with 
amendments; it insists upon its amend- 
ments to the bill, asks a conference 
with the Senate on the disagreeing 
votes of the two Houses thereon, and 
appoints the following as managers of 
the conference on the part of the 
House: 

From the Committee on Merchant Marine 
and Fisheries: Mr. Jones of North Carolina, 
Mr. Sttjdds, Mr. Lowry of Washington, Mr. 
Hughes, Mr. Carper, Mr. Manton, Mr. 
Davis of Michigan, Mr. Lent, Miss Schnei- 
der, and Mr. Saxton. 

From the Committee on Public Works and 
Transportation: Mr. Anderson, Mr. Roe, 
Mr. Mineta, Mr. Oberstar, Mr. Nowak, Mr. 
Towns, Mr. Hammerschmidt, Mr. Stange- 
land, Mr. Molinari, and Mr. Gallo. 

The message further announced 
that the House disagrees to the 
amendment of the Senate to the bill 
(H.R. 5261) to reauthorize and amend 
the Indian Health Care Improvement 
Act, and for other purposes; it agrees 
to the conference asked by the Senate 
on the disagreeing votes of the two 
Houses thereon, and appoints the fol- 
lowing as managers of the conference 
on the part of the House: 

From the Committee on Energy and Com- 
merce: Mr. Dingell, Mr. Waxman, Mr. 
Wyden, Mr. Madigan, and Mr. Nielson of 
Utah. 

From the Committee on Interior and In- 
sular Affairs: Mr. Udall, Mr. Campbell, Mr. 
Richardson, Mr. Young of Alaska, and Mr. 
Rhodes. 

The message also announced that 
the House has passed the bill (S. 2749) 
to authorize appropriations for fiscal 
year 1989 for military activities of the 
Department of Defense, for military 
construction, and for defense activities 
of the Department of Energy, to pre- 
scribe personnel strengths for such 
fiscal year for the Armed Forces, and 
for other purposes, with amendments; 
it insists upon its amendments to the 
bill, asks a conference with the Senate 
on the disagreeing votes of the two 
Houses thereon, and appoints the fol- 
lowing as managers of the conference 
on the part of the House: 

From the Committee on Armed Services, 
for consideration of the Senate bill, and the 
House amendments, and modifictions com- 
mitted to conference: Mr. Aspin, Mr. Del- 
lums, Mr. Montgomery, Mr. Hutto, Mr. 
Skelton, Mr. Leath of Texas, Mr. McCur- 
dy, Mr. Foglietta, Mr. Hertel, Mr. Ortiz, 
Mr. Robinson, Mr. Dickinson, Mr. Martin 
of New York, Mrs. Martin of Illinois, Mr. 
Blaz, Mr. Ravenel, and Mr. Weldon. 

From the Committee on Government Op- 
erations, for consideration of section 921 of 
the Senate bill, and the House amendments, 
and modifications committed to conference: 
Mr. Brooks, Mr. Conyers, Mrs. Collins, 
Mr. Horton, and Mr. Walker. 

From the Committee on Merchant Marine 
and Fisheries, for consideration of section 
921 of the Senate bill, and the House 
amendments, and modifications committed 
to conference: Mr. Jones of North Carolina, 



Mr. Studds, Mr. Hutto, Mr. Davis of Michi- 
gan, and Mr. Young of Alaska. 

From the Committee on Rules, for consid- 
eration of section 921 of the Senate bill, and 
the House amendments, and modifications 
committed to conference: Mr. Pepper, Mr. 
Moakley, Mr. Derrick, Mr. Beilenson, Mr. 
Frost, Mr. Quillen, and Mr. Taylor. 

As additional conferees, for consideration 
of section 921 of the Senate bill, and the 
House amendments, and modifications com- 
mitted to conference: Mr. Foley and Mr. 
Armey. 

The message further announced 
that the House has passed the bill (S. 
2496) to provide for the leasing of cer- 
tain real property to the American Na- 
tional Red Cross, District of Columbia 
Chapter, for the construction and 
maintenance of certain buildings and 
improvements; with an amendment, in 
which it requests the concurrence of 
the Senate. 

The message also announced that 
the House has passed the following 
bills, each with amendments, in which 
it requests the concurrence of the 
Senate: 

S. 1476. An act to designate the Federal 
Record Center at 9700 Page Boulevard, 
Overland, MO, as the "SSG Charles F. Pre- 
vedel Building"; 

S. 1827. An act to designate the Federal 
building located at 330 Booth Street in 
Reno, NV, as the "C. Clifton Young Federal 
Building"; and 

S. 1986. An act to study, control, and 
reduce the pollution of aquatic environ- 
ments from plastic materials. 

The message further announced 
that the House has passed the follow- 
ing bills, in which it requests the con- 
currence of the Senate: 

H.R. 2800. An act to improve Environmen- 
tal Protection Agency data collection and 
dissemination regarding reduction of toxic 
chemical emissions across all media, to 
assist States in providing information and 
technical assistance about waste reduction, 
and for other purposes; 

H.R. 4547. An act to amend the Depart- 
ment of Transportation Act to reauthorize 
local rail service assistance: 

H.R. 5050. An act to amend the Small 
Business Act to establish programs and ini- 
tiate efforts to assist the development of 
small business concerns owned and con- 
trolled by women, and for other purposes; 

H.R. 5052. An act to amend title 31 of the 
United States Code to provide for a transfer 
of control of the General Accounting Office 
Building and to improve the administration 
of the General Accounting Office; 

H.R. 5186. An act to designate the Federal 
building and U.S. Courthouse located at 109 
South Highland, Jackson, TN, as the "Ed 
Jones Federal Building and United States 
Courthouse"; 

H.R. 5200. An act to amend the Immigra- 
tion and Nationality Act to limit the period 
of detention of excludable aliens pending re- 
moval in a manner similar to that provided 
in the case of deportable aliens pending de- 
portation; 

H.R. 5291. An act to provide the Secretary 
of the Air Force with authority to convey 
certain land; and 

H.R. 5442. An act to provide the Environ- 
mental Protection Agency and the public 
with additional information about asbestos 
products. 



ENROLLED BILLS SIGNED 

The message also announced that 
the Speaker has signed the following 
enrolled bills: 

S. 328. An act to amend chapter 39 of title 
31, United States Code, to require the Fed- 
eral Government to pay interest on overdue 
payments, and for other purposes; 

S. 1165. An act to authorize the Secretary 
of the Interior to provide for the develop- 
ment and operation of a visitor and environ- 
mental education center in the Pinelands 
National Reserve, in the State of New 
Jersey; and 

H.R. 1596. An act to amend title 28, 
United States Code, to create two divisions 
in the Judicial District of Maryland. 

The enrolled bills were subsequently 
signed by the President pro tempore 
[Mr. Stennis]. 



At 6:44 p.m., a message from the 
House of Representatives, delivered by 
Mr. Hays, one of its reading clerks, an- 
nounced that the House agree to the 
amendment of the Senate to the 
amendment of the House to the text 
of the bill (S. 2393) to amend the Pro- 
tection and Advocacy for Mentally 111 
Individuals Act of 1986 to reauthorize 
such act, and for other purposes; and 
that the House recedes from its 
amendment to the title of the bill. 

The message also announced that 
the House agrees to the report of the 
committee of conference on the dis- 
agreeing votes of the two Houses on 
the amendment of the Senate to the 
bill (H.R. 3235) to amend the Public 
Health Service Act to revise the pro- 
gram of assistance for health mainte- 
nance organizations. 

The message further announced 
that the House agrees to the report of 
the committee of conference on the 
disagreeing votes of the two Houses on 
the amendent of the House to the bill 
(S. 1579) to amend the Public Health 
Service Act to revise and extend the 
Block Grant Program, and for other 
purposes. 

The message also announced that 
the House agrees to the report of the 
committee of conference on the dis- 
agreeing votes of the two Houses on 
the amendments of the Senate to the 
bill (S. 908) to amend the Inspector 
General Act of 1978. 

The message further announced 
that the House has passed the bill (S. 
836) to amend the Department of 
Energy Organization Act to authorize 
protective force personnel who guard 
the strategic petroleum reserve or its 
storage and related facilities to carry 
firearms while discharging their offi- 
cial duties and in certain instances to 
make arrests without warrant; to es- 
tablish the offense of trespass on 
property of the strategic petroleum re- 
serve, and for other purposes; with an 
amendment, in which it requests the 
concurrence of the Senate. 

The message also announced that 
the House has passed the following 









28358 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



bills; each with amendments, in which 
it requests the concurrence of the 
Senate: 

S. 11. An act to amend title 38, United 
States Code, to establish certain procedures 
for the adjudication of claims for benefits 
under laws administered by the Veterans' 
Administration; to apply the provisions of 
section 553 of title 5, United States Code, to 
rulemaking procedures of the Veterans' Ad- 
ministration; to provide for judicial review 
of certain final decisions of the Board of 
Veterans' Appeals; to provide for the pay- 
ment of reasonable fees to attorneys for 
rendering legal representation to individuals 
claiming benefits under law administered by 
the Veterans' Administration, and for other 
purposes", and 

S. 744. An act to authorize the Environ- 
mental Protection Agency to assist States in 
development of radon programs, to conduct 
a study to determine the extend to which 
randon in the Nation's schools poses a 
threat to children and employees in such 
schools, and for other purposes. 

The message further announced 
that the House agrees to the amend- 
ment of the Senate to the bill (H.R. 
4833) to amend the Public Health 
Service Act to revise and extend the 
programs of nurse education estab- 
lished on title VIII of such act, and for 
other purposes; with an amendment, 
in which it requests the concurrence 
of the Senate. 

The message also announced that 
the House agrees to the amendments 
of the Senate to the bill (H.R. 60) to 
permot the Architect of the Capitol, 
under the direction of the Joint Com- 
mittee on the Library to accept gifts of 
money for the purpose of works of 
fine art for the Capitol, and for other 
purposes; with amendments, in which 
it requests the concurrence of the 
Senate. 

The message further announced 
that the House has passed the follow- 
ing bills, in which it requests the con- 
currence of the Senate: 

H.R. 1510. An act to amend title 35, 
United States Code, and the National Aero- 
nautics and Space Act of 1958, with respect 
to the use of inventions in outer space; 

H.R. 2848. An act to provide for the inter- 
im statutory licensing of the secondary 
transmission by satellite carriers of super- 
stations and network stations for private 
home viewing, to prevent piracy of satellite 
cable programming, and for other purposes; 

H.R. 4939. An act to amend the Safe 
Drinking Water Act to control lead in drink- 
ing water; 

H.R. 4972. An act to authorize appropria- 
tions for the Patent and Trademark Office 
on the Department of Commerce, and for 
other purposes; and 

H.R. 5410. An act to provide for the regis- 
tration of foreign interests in U.S. property, 
and for other purposes. 

The message also announced that 
the House has agreed to the following 
concurrent resolution, in which it re- 
quests the concurrence of the Senate; 

H. Con. Res. 276. A concurrent reso- 
lution expressing the sense of the Con- 
gress that the Surgeon General should 
declare that drunk driving is a nation- 
al crisis. 



MEASURES REFERRED 

The following bills were read the 
first and second times by unanimous 
consent, and referred as indicated: 

H.R. 2800. An act to improve Environmen- 
tal Protection Agency data collection and 
dissemination regarding reduction of toxic 
chemical emissions across all media, to 
assist States in providing information and 
technical assistance about waste reduction, 
and for other purposes; to the Committee 
on Environment and Public Works. 

H.R. 5199. An act to make nonmailable 
any plant, fruit, vegetable, or other matter, 
the movement of which in interstate com- 
merce has been prohibited or restricted by 
the Secretary of Agriculture in order pre- 
vent the dissemination of dangerous plant 
diseases or pests, and for other purposes; to 
the Committee on Governmental Affairs. 

H.R. 5200. An act to amend the Immigra- 
tion and Nationality Act to limit the period 
of detention of excludable aliens pending re- 
moval in a manner similar to that provided 
in the case of deportable aliens pending de- 
portation; to the Committee on the Judici- 
ary. 

H.R. 5315. An act to amend the Congres- 
sional Award Act to extend the Congression- 
al Award Program; to the Committee on 
Governmental Affairs. 

The following concurrent resolution 
was read, and referred as indicated: 

H. Con. Res. 331. Concurent resolution to 
acknowledge the contribution of the Iro- 
quois Confederacy of Nations to the devel- 
opment of the U.S. Constitution and to reaf- 
firm the continuing government-to-govern- 
ment relationship between the Indian tribes 
and the United States established in the 
Constitution; to the Select Committee on 
Indian Affairs. 



George Washington, and the proposal of 
the Bill of Rights as the first ten amend- 
ments to the Constitution; 



MEASURES PLACED ON THE 
CALENDAR 

The following bills were read the 
first and second times by unanimous 
consent, and placed on the calendar: 

H.R. 4146. An act to designate wilderness 
within Olympic National Park, Mount 
Rainier National Park, and North Cascades 
National Park Complex in the State of 
Washington, and for other purposes: 

H.R. 4547. An act to amend the Depart- 
ment of Transportation Act to reauthorize 
local rail service assistance; 

H.R. 5442. An act to provide the Environ- 
mental Protection Agency and the public 
with additional information about asbestos 
products. 



MEASURES HELD AT THE DESK 
The following bill and concurrent 
resolution were ordered held at the 
desk by unanimous consent: 

H.R. 4758. An act to amend the Omnibus 
Crime Control and Safe Streets Act of 1968 
to increase the level of benefits payable 
with respect to the death of public safety 
officers and to provide that nondependent 
parents may be beneficiaries; 

H. Con. Res. 115. A concurrent resolution 
providing for participation by delegations of 
members of both Houses of Congress in 
ceremonies to be held in April 1989 in New 
York City marking the 200th anniversaries 
of the implementation of the Constitution 
as the form of government of the United 
States, the inauguration of President 



ENROLLED BILLS PRESENTED 

The Secretary of the Senate report- 
ed that on today, October 5, 1988, he 
had presented to the President of the 
United States the following enrolled 
bills: 

S. 328. An act to amend chapter 39 of title 
31, United States Code, to require the Fed- 
eral Government to pay interest on overdue 
payments, and for other purposes; and 

S. 1165. An act to authorize the Secretary 
of the Interior to provide for the develop- 
ment and operation of a visitor and environ- 
mental education center in the Pinelands 
National reserve in the State of New Jersey. 



REPORTS OF COMMITTEES 

The following reports of committees 
were submitted: 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment: 

H.R. 441. A bill for the relief of the heirs 
of Master Sergeant Nathaniel Scott, United 
States Army, retired, deceased. 

H.R. 525. A bill for the relief of John M. 
Gill. 

H.R. 945. A bill for the relief of Allen H. 
Platnick. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with amendments: 

H.R. 1133. A bill for the relief of Thomas 
Nelson Flanagan. 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment: 

H.R. 1149. A bill to amend the Foreign 
Sovereign Immunities Act with respect to 
admiralty jurisdiction. 

H.R. 1275. A bill for the relief of Joyce G. 
McFarland. 

H.R. 1385. A bill for the relief of Travis D. 
Jackson. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with amendments: 

H.R. 1388. A bill for the relief of David 
Butler, Aldo Cirone, Richard Denisi, 
Warren Fallon, Charles Hotton, Harold 
Johnson, Jean Lavoie, Vincent Maloney, 
Austin Mortensen, and Kurt Olofsson. 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment: 

H.R. 1826. A bill for the relief of Natasha 
Susan Middelmann, Samantha Abigail Mid- 
delmann, Naomi Katrina Orloff Middel- 
mann, and Hannah Emily Middelmann. 

H.R. 2109. A bill for the relief of Rosa 
Pratts. 

H.R. 2461. A bill for the relief of Milena 
Mesin and Bozena Mesin. 

H.R. 2511. A bill for the relief of Tarek 
Mohamad Mahmoud. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with an amendment: 

H.R. 2802. A bill for the relief of Fleurette 
Seidman. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with an amendment in the 
nature of a substitute: 

H.R. 3146. A bill to clarify certain restric- 
tions on distribution of advertisements and 
other information concerning lotteries and 
similar activities. 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment: 

H.R. 3238. A bill for the relief of Maria 
Linda Sy Gonzalez. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28359 



H.R. 3347. A bill for the relief of Bibianne 
Cyr. 

H.R. 3414. A bill for the relief of Meenak- 
shiben P. Patel. 

H.R. 3917. A bill for the relief of Rajani 
Lai. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with an amendment in the 
nature of a substitute: 

H.R. 4612. A bill to amend title 28, United 
States Code, to provide for an exclusive 
remedy against the United States for suits 
based upon certain negligent or wrongful 
acts or omissions of United States employ- 
ees committed within the scope of their em- 
ployment, and for other purposes. 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment: 

S. Res. 73. Resolution to refer S. 329 enti- 
tled "A bill for the relief of Dynamic Tech- 
nology International, Inc., Lew Malank As- 
sociates, Star Design, Inc., Riverside Preci- 
sion Machines, and certain other individ- 
uals" to the Chief Judge of the United 
States Claims Court for a report thereon. 

S. Res. 187. Resolution referring the bill 
for the relief of Frederick Paul to the Chief 
Judge of the United States Claims Court. 

S. 1456. A bill for the relief of Paulette 
Mendes-Silva. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with an amendment in the 
nature of a substitute: 

S. 1482. A bill to amend title 18 and title 
28, United States Code, to make certain im- 
provements with respect to the Federal ju- 
diciary, and for other purposes. 

S. 1619. A bill to amend the copyright law 
to secure the rights of authors of pictorial, 
graphic, or sculptural works to prevent the 
distortion, mutilation, or other alternation 
of such works, to provide for resale royal- 
ties, and for other purposes. 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment: 

S. 1754. A bill for the relief of Fleurette 
Seidman. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with amendments: 

S. 1878. A bill for the relief of Thomas 
Nelson Flanagan. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with an amendment in the 
nature of a substitute: 

S. 1961. A bill to amend title 28, United 
States Code, to provide Federal debt collec- 
tion procedures. 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment: 

S. 2279. A bill to amend title 11 of the 
United States Code, the bankruptcy code, 
regarding swap agreements. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with an amendment in the 
nature of a substitute and an amendment to 
the title: 

S. 2361. A bill to amend title 18, United 
States Code, to preserve personal privacy 
with respect to the rental, purchase, or de- 
livery of video tapes or similar audio visual 
materials and the use of library materials or 
services. 

By Mr. KENNEDY, from the Committee 
on Labor and Human Resources, without 
amendment: 

S. 2488. A bill to grant employees parental 
and temporary medical leave under certain 
circumstances, and for other purposes. 

By Mr. BIDEN, from the Committee on 
the Judicary, with an amendment: 

S. 2500. A bill to amend title 28, United 
States Code, to provide for an exclusive 
remedy against the United States for suits 
based upon certain negligent or wrongful 



acts of omissions of United States employ- 
ees committed within the scope of their em- 
ployment, and for other purposes. 

By Mr. BIDEN, from the Committee on 
the Judicary, without amendment: 

S. 2781. A bill to change the name of the 
Pacific Tropical Botanical Garden, a feder- 
ally chartered organization, to the National 
Tropical Botanical Garden, and for other 
purposes. 

By Mr. BIDEN, from the Committee on 
the Judiciary, with an amendment: 

S. 2793. A bill to amend title 18 of the 
United States Code to punish corruption. 

By Mr. BIDEN, from the Committee on 
the Judiciary, without amendment and with 
a preamble: 

S.J. Res. 278. Joint resolution designating 
November 20-26, 1988, as "National Family 
Caregivers Week". 

S.J. Res. 280. Joint resolution to designate 
the week of November 27, 1988 through De- 
cember 3, 1988 as "National Home Care 
Week". 

S.J. Res. 301. Joint resolution designating 
January 20, 1989, as "National Skiing Day". 

S.J. Res. 327. Joint resolution commemo- 
rating January 28, 1989, as a "National Day 
of Excellence" in honor of the crew of the 
space shuttle Challenger. 

S.J. Res. 337. Joint resolution acknowledg- 
ing the sacrifices that military families have 
made on behalf of the Nation and designat- 
ing November 21, 1988, as "National Mili- 
tary Families Recognition Day." 

S.J. Res. 346. Joint resolution to designate 
March 25, 1989, as "Greek Independence 
Day: A National Day of Celebration of 
Greek and American Democracy." 

S.J. Res. 352. Joint resolution designating 
September 24, 1989, as "United States Mar- 
shals Bicentennial Day". 

S.J. Res. 355. Joint resolution designating 
October 7, 1988, as "National Teachers Ap- 
preciation Day". 

S.J. Res. 357. Joint resolution designating 
the week beginning November 6, 1988, as 
"National Women Veterans Recognition 
Week". 

S.J. Res. 363. Joint resolution designating 
November 28 through December 2, 1988, as 
"Vocational-Technical Education Week". 

S.J. Res. 365. Joint resolution to designate 
January 28, 1989, as "National Challenger 
Center Day" to honor the crew of the space 
shuttle Challenger. 

S.J. Res. 372. Joint resolution to designate 
the week beginning November 21, 1988, 
through November 27, 1988, as "National 
Adoption Week". 

S.J. Res. 385. Joint resolution to designate 
September 11 through 17, 1988, as "Nation- 
al Youth 2000 Week". 

S.J. Res. 386. Joint resolution to designate 
the week of June 18 through June 24, 1989 
as "National Grasslands Week". 



EXECUTIVE REPORTS OF 
COMMITTEES 

The following executive reports of 
committees were submitted: 

By Mr. BIDEN, from the Committee on 
the Judiciary. 

John M. Duhe, Jr., of Louisiana, to be U.S. 
Circuit Judge for the Fifth Circuit. 

Richard L. Nygaard, of Pennsylvania, to 
be U.S. Circuit Judge for the Third Circuit. 

Lewis T. Babcock, of Colorado, to be U.S. 
District Judge for the District of Colorado. 

Norwood Carlton Tilley, Jr., of North 
Carolina, to be U.S. District Judge for the 
Middle District of North Carolina. 



Alex R. Munson, of the Northern Mariana 
Islands, to be Judge for the District Court 
for the Northern Mariana Islands for a term 
of 10 years. 

Robert Leon Jordan, of Tennessee, to be 
U.S. District Judge for the Eastern District 
of Tennessee. 

D. Brooks Smith, of Pennsylvania, to be 
U.S. District Judge for the Western District 
of Pennsylvania. 

Charles R. Butler, Jr., of Alabama, to be 
U.S. District Judge for the Southern Dis- 
trict of Alabama. 

Jay C. Waldman, of Pennsylvania, to be 
U.S. District Judge for the Eastern District 
of Pennsylvania. 

Paul V. Gadola, of Michigan, to be U.S. 
District Judge for the Eastern District of 
Michigan. 

James R. McGregor, of Pennsylvania, to 
be U.S. District Judge for the Western Dis- 
trict of Pennsylvania. 

Thomas M. Boyd, of Virginia, to be an As- 
sistant Attorney General. 

Douglas W. Kmiec, of Indiana, to be an 
Assistant Attorney General. 

Dennis C. Vacco, of New York, to be U.S. 
Attorney for the Western District of New 
York for the term of 4 years. 

Jay B. Stephens, of Virginia, to be U.S. At- 
torney for the District of Columbia for the 
term of 4 years. 

Richard W. Cameron, of California, to be 
U.S. Marshal for the Southern District of 
California for the term of 4 years. 

Thomas J. Ashcraft, of North Carolina, to 
be U.S. Attorney for the Western District of 
North Carolina for the term of 4 years. 

Noreen T. Skagen, of Washington, to be 
U.S. Marshal for the Western District of 
Washington for the term of 4 years. 

Stuart E. Earnest, of Oklahoma, to be U.S. 
Marshal for the Western District of Oklaho- 
ma for the term of 4 years. 

The following-named person to be a 
Member of the Board of Directors of the 
State Justice Institute for a term expiring 
September 17, 1991: Clement Clay Torbert, 
Jr., of Alabama. 

The following-named person to be a 
Member of the Board of Directors of the 
State Justice Institute for a term expiring 
September 17, 1991: Daniel John Meador, of 
Virginia. 

John F. Daffron, Jr., of Virginia, to be a 
Member of the Board of Directors of the 
State Justice Institute for a term expiring 
September 17, 1991. 

Joseph Wentling Brown, of Nevada, to be 
a Member of the Board of Directors of the 
State Justice Institute for a term expiring 
September 17, 1989. 



INTRODUCTION OP BILLS AND 
JOINT RESOLUTIONS 

The following bills and joint resolu- 
tions were introduced, read the first 
and second time by unanimous con- 
sent, and referred as indicated: 
By Mr. SPECTER: 

S. 2863. A bill to establish constitutional 
procedures for the imposition of the death 
penalty for certain Federal offenses; to the 
Committee on the Judiciary. 
By Mr. KARNES: 

S. 2864. A bill to amend the Internal Reve- 
nue Code of 1986 to provide a refundable 
credit to parents for dependents under age 
6, to provide liability reform and risk reduc- 
tion for child care providers, to provide in- 
centives for employer-provided child care, 









'•*'■'■■ 



28360 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



and for other purposes; to the Committee 
on Finance. 

By Mr. MURKOWSKI: 

S. 2865. A bill to enroll 20 individuals 
under the Alaska Native Claims Settlement 
Act; to the Committee on Energy and Natu- 
ral Resources. 

By Mr. LAUTENBERG: 

S.J. Res. 393. A joint resolution to desig- 
nate December 7, 1988, as "National Pearl 
Harbor Remembrance Day" on the occasion 
of the anniversary of the attack on Pearl 
Harbor; to the Committee on the Judiciary. 



SUBMISSION OF CONCURRENT 

AND SENATE RESOLUTIONS 
The following concurrent resolutions 
and Senate resolutions were read, and 
referred (or acted upon), as indicated: 
By Mr. SPECTER (for himself, Mr. 
DeConcini, Mr. Inouye, and Mr. 
Kasten): 
S. Res. 487. Resolution expressing the 
sense of the Senate with respect to limiting 
the sale of arms to nations in the Mideast; 
to the Committee on Foreign Relations. 
By Mr. McCAIN: 
S. Res. 488. Resolution providing for fair 
employment practices in the Senate; to the 
Committee on Rules and Administration. 

By Mr. BYRD (for himself and Mr. 
Dole): 
S. Res. 489. Resolution to direct the 
Senate Legal Counsel to represent an em- 
ployee of the Senate in the case of United 
States v. Harold Freidman, et al; considered 
and agreed to. 

By Mr. BYRD (for himself and Mr. 
Dole): 
S. Res. 490. Resolution to direct the 
Senate Legal Counsel to represent Senator 
Stevens in the case of Hunter, et al. v. Kala- 
marides, et al; considered and agreed to. 
By Mr. BYRD (for Mr. Leahy): 
S. Con. Res. 153. A concurrent resolution 
to correct the enrollment of S. 659; consid- 
ered and agreed to. 



STATEMENTS ON INTRODUCED 
BILLS AND JOINT RESOLUTIONS 
By Mr. SPECTER: 

S. 2863. A bill to establish constitu- 
tional procedures for the imposition of 
the death penalty for certain Federal 
offenses; referred to the Committee on 
the Judiciary. 

death penalty legislation 

Mr. SPECTER. Mr. President, today 
I introduce legislation which enhances 
the Federal Government's fight 
against crime. My bill will establish 
constitutional procedures for the im- 
position of the sentence of death in 
Federal criminal cases, as well as 
create two additional capital offenses. 

It is my sense that this legislation is 
long overdue. The various Federal of- 
fenses which include a capital penalty 
have not met constitutional muster 
since the Supreme Court squarely ad- 
dressed this issue in Furman versus 
Georgia, in 1972. This body has not re- 
sponded to the High Court's ruling 
and I believe now is the time to do so. 
There are various Federal statutes 
which include capital crimes. These of- 
fenses include treason, assassination of 



the President, murder and air piracy 
and cover other offenses where exist- 
ing Federal law calls for the death 
penalty, but procedures have not been 
updated to accommodate decision by 
the Supreme Court of the United 
States since 1972. 

This legislation will create two addi- 
tional capital crimes. The first pro- 
vides for the death penalty for a pris- 
oner serving a life sentence in a Feder- 
al confinement institution who com- 
mits murder. This is a continuing 
problem in our Nation's prison system, 
including our Federal system. This 
provision will apply to those prisoners 
already beyond redemption or reha- 
bilitation—those already sentenced to 
life imprisonment for their prior hei- 
nous crimes. 

Clearly, there is no deterrent for 
someone already serving a life sen- 
tence if the most that can happen 
with another murder is an additional 
life sentence. This provision will pro- 
vide such a deterrent by allowing a 
jury or court to impose the sentence of 
death after considering numerous rele- 
vant factors, including whether the 
murder occurred during an escape at- 
tempt, a kidnapping, a prison riot, the 
taking of hostages, sexual assault as a 
result of drug dealing, or by use of a 
firearm. 

This legislation also would amend a 
statutory provision that I authored in 
1986, 18 U.S.C. 2331, and make a viola- 
tion of that provision a capital crime. 
This section, which authorizes extra- 
territorial jurisdiction for the United 
States over terrorist acts abroad 
against American citizens, presently 
provides a maximum penalty of life 
imprisonment. Sadly, and with in- 
creasing frequency, terrorists are at- 
tacking American citizens throughout 
the world and I believe it is wholly ap- 
propriate that such despicable actions 
be considered a capital offense. 
constitutionality 
Mr. President, a complete revision of 
the Federal Criminal Code to provide 
for the death penalty in appropriate 
circumstances must meet the constitu- 
tional guidelines set forth by the Su- 
preme Court. In Furman versus Geor- 
gia, the Court did not conclude that 
capital punishment is unconstitution- 
al, but only the procedures of the 
Georgia statute were constitutionally 
invalid because it provided unguided 
discretion to the fact-finder. Other 
States' statutes were similar to Geor- 
gia's and the ultimate effect of the 
Court's decision was the invalidation 
of most capital punishment statutes 
throughout the country. However, 37 
States and Congress have reenacted 
capital punishment statutes in accord- 
ance with the procedures articulated 
by the Court. In fact, in 1976, Gregg v. 
Georgia, 428 U.S. 153, the Court again 
reviewed the constitutionality of cap- 
ital punishment and upheld Georgia's 
revised death penalty law. 



Since that time, procedures promul- 
gated by the States have continually 
met constitutional muster. Some have 
argued, however, including members 
of the Supreme Court, that capital 
punishment itself is unconstitutional. 
My reading of the Constitution results 
in a different conclusion. There are 
numerous instances in the Constitu- 
tion of the United States which specif- 
ically recognizes and permits capital 
punishment. For example, the fifth 
amendment specifies that "no person 
shall be held to answer for a capital 
* * * crime unless on a presentment or 
indictment of a Grand Jury * * *"; the 
fifth amendment also provides "nor 
shall any person be subject for the 
same offense to be twice put in jeop- 
ardy of life or limb * * *"; and that no 
person shall "be deprived of life, liber- 
ty or property without due process of 

law 

Moreover, in 1958, Chief Justice 
Warren wrote: 

At the outset let us put to one side the 
death penalty as an index of the constitu- 
tional limit on punishment. Whatever the 
arguments may be against capital punish- 
ment both on moral grounds and in terms of 
accomplishing the purpose of punishment, 
and they are forceful, the death penalty has 
been employed throughout our history and, 
in a day when it is still widely accepted, it 
cannot be said to violate the constitutional 
concept of cruelty." Trop v. Dulles, 356 U.S. 
86, 99 (Dicta) (1958). 

In addition to the legal underpin- 
nings of the Court's conclusion that 
capital punishment is constitutional, 
there also was some consideration of 
the general sentiment throughtout 
the country in support of the death 
penalty: 

"Despite the continuing debate, dating 
back to the 19th Century over the morality 
and utility of capital punishment, it is now 
evident that a large portion of American so- 
ciety continues to regard it as an appropri- 
ate and necessary criminal sanction. 

The most marked indication of society's 
endorsement of the death penalty for 
murder is the legislative response to 
Furman. The legislators of at least 35 states 
have enacted new statutes to provide for the 
death penalty for at least some crimes that 
result in the death of another person. The 
United States Congress in 1974, enacted a 
statute providing the death penalty for air- 
craft piracy that results in death. . . . But 
all of the post-Furman statutes make clear 
that capital punishment itself has not been 
rejected by the elected representatives of 
the people." Gregg v. Georgia, 428 U.S. at 
179-81. 

Significantly, opinion polls— while 
not of legal significance, nonetheless 
support the Court's conclusion that 
there is "a marked indication of soci- 
ety's endorsement of the death penal- 
ty." A 1986 poll concluded that 70 per- 
cent favored the penalty with 22 per- 
cent in opposition and 8 percent with 
no opinion. 

Consequently, with requisite proce- 
dural protections, capital punishment 
is an appropriate and supportable pen- 






October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28361 



alty. This legislation will offer the full 
panoply of procedural protections re- 
quired by the Supreme Court for the 
accused and ensure that civil and con- 
stitutional rights are maintained. The 
procedural protections in this bill are 
similar to those promulgated by the 
States, as well as provided in S. 2455, 
"Death Penalty in Cases of Drug Re- 
lated Killings," offered by my col- 
league, Senator D'Amato, and passed 
by the Senate on June 10, 1988. 

The procedural process includes bi- 
furcated proceedings; a listing of ag- 
gravating factors and a nonexclusive 
listing of the mitigating factors; and a 
provision of the automatic appeal of 
the judgment. 

The Government would be required 
to give notice to the defendant before 
trial of the intention to seek a sen- 
tence of death. If found guilty of the 
offense, a sentencing hearing would be 
held before the same jury, or another 
legally constituted factfinder. The 
factfinder would make a series of de- 
terminations before a sentence of 
death could be imposed. The threshold 
requirements for a capital sentence 
are: (Da conclusion that a general ag- 
gravating factor exists, and (2) that a 
specific aggravating factor to the par- 
ticular offense also exists. If these re- 
quirements are not met, the sentence 
of death cannot be imposed. 

Additionally, a finding of any aggra- 
vating factor must be by unanimous 
agreement. The findings of any miti- 
gating factors as specified in the bill or 
determined independently, would 
weigh against aggravating factors to 
determine whether the sentence of 
death should be imposed. 

Unanimous consent would not be re- 
quired to establish a mitigating factor, 
such a finding could be made by one 
or more members of the jury. Any 
member of the jury who finds a miti- 
gating factor may consider such a 
factor when deliberating the applica- 
tion of the death penalty. 

The imposition of the death penalty 
would only occur upon the unanimous 
vote by the jury. Importantly, a sen- 
tence of death would not be carried 
out upon a person who is under 18 
years of age at the time the crime is 
committed, or because the offender by 
reason of mental disease or defect, is 
unable to understand his impending 
death or the reasons for it. 

Mindful of the concerns by many 
that a capital sentence may be im- 
posed discriminatorily, this legislation 
also would require the court to in- 
struct the jury that it shall not consid- 
er the race or color, national origin, or 
sex of the defendant, or the victim, 
and that the jury is not to recommend 
a sentence of death unless it has con- 
cluded that it would recommend a sen- 
tence of death for the crime in ques- 
tion regardless of the race of the de- 
fendant or the victim. To buttress the 
jury instructions, each juror would be 



required to file with the court, a certif- 
icate stating that the above-mentioned 
factors were not considered when 
reaching his or her individual decision 
on the imposition of the death penal- 
ty. 

Capital punishment has long been a 
contentious issue. However, it is criti- 
cal in ensuring an orderly society. The 
Senate has recently addressed this 
issue with the passage of S. 2455 men- 
tioned previously. Accordingly, that is 
a recognition that capital punishment 
is indeed necessary to effectively deter 
crime. During my years as a public 
servant, especially during my service 
as district attorney for the city of 
Philadelphia, it has been clear that 
criminals are extremely concerned 
about the potential sentence they may 
receive for a criminal act. I have found 
the death penalty to be a deterrent to 
burglars and robbers carrying weapons 
for fear that there may be a killing 
with the attendant possibility of the 
death penalty. 

The retribution inherent in capital 
punishment illustrates that the com- 
munity will not tolerate the disregard 
of basic human values. Consequently, 
in light of the Court's affirmative de- 
termination of constitutionality of 
capital punishment, it is my sense that 
we should expeditiously reform the 
present statutory codification in order 
to provide the complete set of penal- 
ties originally intended by Congress. 

Mr. President, at the present time 
there are many statutes on the Feder- 
al books on capital punishment cover- 
ing treason, assassination of the Presi- 
dent, murder, air piracy, to name a 
few. None is valid under the interpre- 
tations of the Supreme Court of the 
United States on the decisions handed 
down since 1972. 

There was one effort at legislation in 
1974 under the Air Piracy Act and 
that bill does not conform to the deci- 
sions of the Supreme Court of the 
United States. 

In Purman versus Georgia and cer- 
tain labor cases, the Supreme Court 
set down certain procedural standards 
that had to be complied with and 
there has not been an updating on this 
important legislation on the Federal 
books to comply with those Supreme 
Court decisions. 

Mr. President, this legislation would 
establish compliance with those im- 
portant rules of procedure articulated 
by the Supreme Court and would vali- 
date those statutes now on the books. 

This legislation would add two of- 
fenses for capital punishment. One is 
a situation where a U.S. citizen is mur- 
dered by terrorists in the course of a 
terrorist act. 

The second is where someone is serv- 
ing a life sentence in the Federal peni- 
tentiary and commits an additional 
murder. 

Mr. President, the detailed state- 
ment which I will offer in a moment 



contains the full statement of my rea- 
sons, but I will state in essence with 
the remaining time that I have left 
that this legislation is very important 
because of the strong public concern 
that there be an adequate deterrent to 
murder. Some 35 States have reenact- 
ed capital punishment after the Su- 
preme Court decision in Furman 
versus Georgia and this Senator, while 
district attorney of Philadelphia was 
the vice chairman of the Pennsylvania 
Commission to reconsider the death 
penalty. The chairman of that Com- 
mission was the attorney general of 
the State, who was opposed to the 
death penalty, who was the appointing 
authority, the then-Governor of Penn- 
sylvania, Governor Milton Shapp. 

The minority views prevailed and 
the death penalty was reenacted in 
Pennsylvania because of public con- 
cern on this issue which has been rep- 
licated in some 34 other States. 

Mr. President, the experience that I 
have had as district attorney of Phila- 
delphia has persuaded me that capital 
punishment is, in fact, a deterrent. 
One case is illustrative of many which 
I saw where would-be robbers and 
would-be burglars were reluctant to 
take along weapons for fear that a 
death would result and they would be 
liable, perhaps, for the death penalty. 
There was a celebrated case, Mr. 
President, of Caters, Rivers, and Wil- 
liams which was a robbery which 
three defendants perpetrated in Phila- 
delphia in the late 1950's. Caters and 
Rivers were young men with marginal 
IQ's. Caters was 17 and Rivers was 18. 
They refused to go along on the rob- 
bery plan because Williams had a re- 
volver. 

Williams said, "Well, I won't take 
the gun with us." He put it in the 
drawer and slammed it shut and the 
three moved on to the scene of the 
robbery. But, unbeknownst to Caters 
and Rivers, Williams reached back 
into the drawer, pulled out the 
weapon, and put it in his pocket. 

In the course of the robbery, Wil- 
liams used the weapon and a murder 
ensued. All three received capital pun- 
ishment. Caters and Rivers said in 
their statements that had they known 
that Williams was going to take the re- 
volver, they would not have participat- 
ed in the robbery because of their con- 
cern about capital punishment, about 
the death penalty. 

These two men, Caters and Rivers, 
as I have indicated, had marginal IQ's, 
not really enormously adroit or enor- 
mously intelligent, but had sufficient 
capacity and understanding to refuse 
to go along on a robbery attempt if 
they faced the possibility of the death 
penalty. 

Caters and Rivers, Mr. President, 
had their sentences commuted largely 
on the basis of that underlying con- 






28362 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



cern. Their sentences were commuted 
to life imprisonment. 

But I suggest, Mr. President, that 
that case is only illustrative of many 
cases, some of which this Senator has 
seen, where robbers do not want to 
carry weapons, where burglars do not 
want to carry weapons because they 
are concerned that a killing may occur 
and they may face the death penalty. 
My experience has convinced me that 
the death penalty is an effective deter- 
rent and an appropriate weapon 
against murder. 

Mr. President, I know that there will 
not be time, in the course of the 100th 
Congress, to consider this legislation, 
but this is a bill which this Senator in- 
tends to press in the 101st Congress. 
The death penalty issue is going to be 
before the Senate on the drug bill, but 
we need a comprehensive revision to 
the death penalty statutes on the Fed- 
eral code which are there now but 
which are invalid. This will give my 
colleagues an opportunity to study 
this matter in advance of the 101st 
Congress when this Senator intends to 
reintroduce the bill and to press for 
action in the Judiciary Committee by 
the Senate and by the Congress. 

Mr. President, I ask unanimous con- 
sent that the text of the bill be print- 
ed in the Record. 

There being no objection, the bill 
was ordered to be printed in the 
Record, as follows: 

S. 2863 
Be it enacted by the Senate and House of 
Representatives of the United States of 
America in Congress assembled, 

SECTION 1. DEATH PENALTY PROCEDURES. 

Title 18 of the United States Code is 
amended by adding the following new chap- 
ter after chapter 227: 

"CHAPTER 228— DEATH SENTENCE 
"Sec. 3591. Sentence of death. 
"Sec. 3592. Procedures applicable to the 

death penalty. 
"§ 3591. Sentence of death 

"A defendant who has been found guilty 
of any offense for which a sentence of death 
is provided shall be sentenced to death only 
if a hearing is held in accordance with sec- 
tion 3592. 

"§ 3592. Procedures applicable to the death penal- 
ty 

"(a) Notice by the Government in Death 
Penalty Cases.— 

"(1) In general.— Whenever the Govern- 
ment intends to seek the death penalty for 
an offense for which one of the sentences 
provided is death, the attorney for the Gov- 
ernment, a reasonable time before trial or 
acceptance by the court of a plea of guilty, 
shall sign and file with the court, and serve 
upon the defendant, a notice— 

"(A) that the Government in the event of 
conviction will seek the sentence of death; 
and 

"(B) setting forth the aggravating factors 
enumerated in subsection (g) and any other 
aggravating factors which the Government 
will seek to prove as the basis for the death 
penalty. 

"(2) Amendments.— The court may permit 
the attorney for the Government to amend 
this notice for good cause shown. 



"(b) Hearing Before Court or Jury.— 

"(1) In general.— When the attorney for 
the Government has filed a notice as re- 
quired under subsection (a) and the defend- 
ant is found guilty of or pleads guilty to an 
offense for which one of the sentences pro- 
vided is death, the judge who presided at 
the trial or before whom the guilty plea was 
entered, or any other judge if the judge who 
presided at the trial or before whom the 
guilty plea was entered is unavailable, shall 
conduct a separate sentencing hearing to de- 
termine the punishment to be imposed. The 
hearing shall be conducted— 

"(A) before the jury which determined 
the defendant's guilt; 

"(B) before a jury impaneled for the pur- 
pose of the hearing if— 

"(i) the defendant was convicted upon a 
plea of guilty; 

"(ii) the defendant was convicted after a 
trial before the court sitting without a jury; 

"(iii) the jury which determined the de- 
fendant's guilt has been discharged for good 
cause; or 

"(iv) after initial imposition of a sentence 
under this section, redetermination of the 
sentence under this section is necessary; or 

"(C) before the court alone, upon the 
motion of the defendant and with the ap- 
proval of the Government. 

"(2) Composition of jury.— A jury impan- 
eled pursuant to paragraph (1KB) shall con- 
sist of 12 members, unless, at any time 
before the conclusion of the hearing, the 
parties stipulate with the approval of the 
court that it shall consist of any number 
less than 12. 

"(c) Proof of Aggravating and Mitigat- 
ing Factors.— Notwithstanding rule 32(c) of 
the Federal Rules of Criminal Procedure, 
when a defendant is found guilty of or 
pleads guilty to an offense for which the 
sentence provided is death, no presentence 
report shall be prepared. In the sentencing 
hearing, information may be presented as to 
any matter relevant to the sentence and 
shall include matters relating to any of the 
aggravating or mitigating factors set forth 
in subsections (f ) and (g), or any other miti- 
gating factor. Where information is present- 
ed relating to any of the aggravating factors 
set forth in subsection (g), information may 
be presented relating to any other aggravat- 
ing factor. Information presented may in- 
clude the trial transcript and exhibits if the 
hearing is held before a jury or judge not 
present during the trial. Any other informa- 
tion relevant to such mitigating or aggravat- 
ing factors may be presented by either the 
Government or the defendant, regardless of 
its admissibility under the rules governing 
admission of evidence at criminal trials, 
except that information may be excluded if 
its probative value is substantially out- 
weighed by the danger of unfair prejudice, 
confusion of the issues, or misleading the 
jury. The Government and the defendant 
shall be permitted to rebut any information 
received at the hearing and shall be given 
fair opportunity to present argument as to 
the adequacy of the information to estab- 
lish the existence of any of the aggravating 
or mitigating factors and as to appropriate- 
ness in that case of imposing a sentence of 
death. The Government shall open the ar- 
gument. The defendant shall be permitted 
to reply. The Government shall then be per- 
mitted to reply in rebuttal. The burden of 
establishing the existence of any aggravat- 
ing factor is on the Government, and is not 
satisfied unless established beyond a reason- 
able doubt. The burden of establishing the 
existence of any mitigating factor is on the 



defendant, and is not satisfied unless estab- 
lished by a preponderance of the evidence. 

"(d) Return of Findings.— The jury, or if 
there is no jury, the court, shall consider all 
the information received during the hear- 
ing. It shall return special findings identify- 
ing any aggravating factors set forth in sub- 
section (g), found to exist. If one of the ag- 
gravating factors set forth in subsection 
(g)(1) and another of the aggravating fac- 
tors set forth in paragraphs (2) through (4) 
of subsection (g) is found to exist, a special 
finding identifying any other aggravating 
factor may be returned. A finding with re- 
spect to a mitigating factor may be made by 
one or more of the members of the jury, 
and any member of the jury who finds the 
existence of a mitigating factor may consid- 
er such a factor established for purposes of 
this subsection, regardless of the number of 
jurors who concur that the factor has been 
established. A finding with respect to any 
aggravating factor must be unanimous. If 
an aggravating factor set forth in subsection 
(g)(1) is not found to exist or an aggravating 
factor set forth in subsection (g)(1) is found 
to exist but no other aggravating factor set 
forth in subsection (g) is found to exist, the 
court shall impose a sentence, other than 
death, authorized by law. If an aggravating 
factor set forth in subsection (g)(1) and one 
or more of the other aggravating factors set 
forth in subsection (g) are found to exist, 
the jury, or if there is no jury, the court, 
shall then consider whether the aggravating 
factor or factors found to exist sufficiently 
outweigh any mitigating factor or factors 
found to exist, or in the absence of mitigat- 
ing factors, whether the aggravating factors 
are themselves sufficient to impose a sen- 
tence of death. Based upon this consider- 
ation, the jury by unanimous vote, or if 
there is no jury, the court, shall return a 
finding as to whether a sentence of death 
should be imposed. 

"(e) Imposition of Sentence.— Upon a 
finding that a sentence of death should be 
imposed, the court shall sentence the de- 
fendant to death. Otherwise the court shall 
impose a sentence, other than death, au- 
thorized by law. A sentence of death shall 
not be carried out upon a person who is 
under 18 years of age at the time the crime 
was committed. A sentence of death shall 
not be carried out upon a person who, by 
reason of a mental disease or defect, is 
unable to understand his impending death 
or the reasons for it. 

"(f) Mitigating Factors.— In determining 
whether a sentence of death is to be im- 
posed on a defendant, the following mitigat- 
ing factors shall be considered but are not 
exclusive: 

"(1) The defendant's capacity to appreci- 
ate the wrongfulness of his conduct or to 
conform his conduct to the requirements of 
law was significantly impaired, but not so 
impaired as to constitute a defense to the 
charge. 

"(2) The defendant was under unusual 
and substantial duress, although not such 
duress as constitutes a defense to the 
charge. 

"(3) The defendant is punishable as a 
principal (as defined in section 2(a) of title 
18 of the United States Code) in the of- 
fense, which was committed by another, but 
the defendant's participation was relatively 
minor, although not so minor as to consti- 
tute a defense to the charge. 

"(4) The defendant could not reasonably 
have foreseen that his conduct in the course 
of the commission of murder, or other of- 
fense resulting in death for which the de- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28363 



fendant was convicted, would cause, or 
would create a grave risk of causing, death 
to any person. 

"(g) Aggravating Factors for Homicide.— 

"(1) General factors.— Except as provid- 
ed in paragraphs (2), (3), and (4), in deter- 
mining whether a sentence of death should 
be imposed for an offense for which one of 
the sentences provided is death, the jury, or 
if there is no jury, the court shall consider 
each of the following aggravating factors 
which are not exclusive: 

"(A) The defendant— 

"(i) intentionally killed the victim; 

"(ii) intentionally inflicted serious bodily 
injury which resulted in the death of the 
victim; 

"(iii) intentionally engaged in conduct in- 
tending that the victim be killed or that 
lethal force be employed against the victim, 
which resulted in the death of the victim. 

"(iv) intentionally engaged in conduct 
which— 

"(I) the defendant knew would create a 
grave risk of death to a person, other than 
one of the participants in the offense; and 

"(II) resulted in the death of the victim. 

"(B) The defendant has been convicted of 
another Federal offense, or a State offense 
resulting in the death of a person, for which 
a sentence of life imprisonment or a sen- 
tence of death was authorized by statute. 

"(C) The defendant has previously been 
convicted of two or more State or Federal 
offenses punishable by a term of imprison- 
ment of more than one year, committed on 
different occasions, involving the infliction 
of, or attempted infliction of, serious bodily 
injury upon another person. 

"(D) In the commission of the offense or 
in escaping apprehension for a violation of 
an offense for which a sentence of death is 
provided the defendant knowingly created a 
grave risk of death to one or more persons 
in addition to the victim or victims of the 
offense. 

"(E) The defendant procured the commis- 
sion of the offense by payment, or promise 
of payment, of anything of pecuniary value. 

"(F) The defendant committed the of- 
fense as consideration for the receipt, or in 
the expectation of the receipt, of anything 
of pecuniary value. 

"(G) The defendant committed the of- 
fense after substantial planning and 
premeditation. 

"(H) The victim was particularly vulnera- 
ble due to old age, youth, or infirmity. 

"(I) The defendant committed the offense 
in an especially heinous, cruel, or depraved 
manner. 

"(2) Aggravating factors for espionage 
and treason.— In determining whether a 
sentence of death should be imposed for an 
offense described in section 794, the jury, or 
if there is no jury, the court, shall consider 
each of the following aggravating factors 
and determine which, if any, exist: 

"(A) the defendant has previously been 
convicted of another offense involving espi- 
onage or treason for which either a sen- 
tence of life imprisonment or death was au- 
thorized by statute; 

"(B) in the commission of the offense the 
defendant knowingly created a grave risk of 
substantial danger to the national security; 
and 

"(C) in the commission of the offense the 
defendant knowingly created a grave risk of 
death to another person. 
The jury, or if there is no jury, the court, 
may consider whether any other aggravat- 
ing factor exists. 



"(3) Aggravating factors for homicide 
and for attempted murder of the presi- 
DENT.— In determining whether a sentence 
of death should be imposed for an offense 
described in section 1751(c), the jury, or if 
there is no jury, the court, shall consider 
each of the following aggravating factors 
and determine which, if any, exist: 

"(A) the death, or injury resulting in 
death, occurred during the commission or 
attempted commission of, or during the im- 
mediate flight from the commission of, an 
offense under section 751 (prisoners in cus- 
tody of institution or officer), section 794 
(gathering or delivering defense information 
to aid foreign government), section 844(d) 
(transportation of explosives in interstate 
commerce for certain purposes), section 
844(f) (destruction of Government property 
in interstate commerce by explosives), sec- 
tion 1118 (prisoners serving life term), sec- 
tion 1201 (kidnaping), or section 2381 (trea- 
son) of this title, or section 902 (i) or (n) of 
the Federal Aviation Act of 1958, as amend- 
ed (49 U.S.C. 1472 (i) or (n)) (aircraft 
piracy); 

"(B) the defendant committed the offense 
after substantial planning and premedita- 
tion to cause the death of a person or 
commit an act of terrorism; or 

"(C) the defendant committed the offense 
against— 

"(i) the President of the United States, 
the President-elect, the Vice President, the 
Vice-President-elect, the Vice-President-des- 
ignate, or, if there is no Vice President, the 
officer next in order of succession to the 
office of the President of the United States, 
or any person who is acting as President 
under the Constitution and laws of the 
United States; 

"(ii) a chief of state, head of government, 
or the political equivalent, of a foreign 
nation; 

"(iii) a foreign official listed in section 
1116(b)(3)(A) of this title, if he is in the 
United States on official business; or 

"(iv) a Federal public servant who is a 
judge, a law enforcement officer, or an em- 
ployee of a United States penal or correc- 
tional institution — 

"(I) while he is engaged in the perform- 
ance of his official duties; 

"(II) because of the performance of his of- 
ficial duties; or 

"(III) because of his status as a public 
servant. 

For purposes of this subparagraph, a 'law 
enforcement officer' is a public servant au- 
thorized by law or by a Government agency 
or Congress to conduct or engage in the pre- 
vention, investigation, or prosecution of an 
offense. 

"(4) Aggravating factors for murder by a 
federal prisoner.— In determining whether 
a sentence of death should be imposed for 
an offense described in section 1118, the 
jury, or if there is no jury, the court, shall 
consider each of the following aggravating 
factors and determine which, if any, exist: 

"(A) the defendant committed the offense 
during the course of seizing, confining, in- 
veighing, decoying, kidnaping, abducting, 
carrying away, holding hostage, or holding 
for ransom or otherwise any person; 

"(B) the death or injury resulting in death 
occurred during the commission or attempt- 
ed commission of, or during the immediate 
flight from the commission or attempted 
commission of, an offense under section 751 
(escape by prisoner in custody of institution 
or officer); 

"(C) the defendant committed the offense 
during the course of perpetrating or at- 



tempting to perpetrate a sexual assault on 
any person; 

"(D) the defendant committed the offense 
during the course of, on account of, or as a 
result of any transaction concerning or dis- 
tribution of any controlled substance as de- 
fined by schedules I, II, III, IV, and V of sec- 
tion 812 of title 21; 

"(E) the defendant committed the offense 
while armed with, or having readily avail- 
able, a firearm, as defined in section 
921(a)(3) of this title; and 

"(F) the defendant committed the offense 
during the course of inciting, organizing, 
promoting, encouraging, participating in, 
carrying out, or aiding or abetting any 
person in inciting, participating in, or carry- 
ing on a riot as defined in section 2102 of 
this title. 

"(h) Right of the Defendant to Justice 
Without Discrimination.— In any hearing 
held before a jury under this section, the 
court shall instruct the jury that in its con- 
sideration of whether the sentence of death 
should be imposed it shall not consider the 
race, color, national origin, or sex of the de- 
fendant or the victim, and that the jury is 
not to recommend a sentence of death 
unless it has concluded that it would recom- 
mend a sentence of death for the crime in 
question no matter what race the defend- 
ant, or the victim, may be. The jury shall 
return to the court a certificate signed by 
each juror that consideration of race, color, 
national origin, creed, or sex of the defend- 
ant or the victim was not involved in reach- 
ing his or her individual decision, and that 
the individual juror would have made the 
same recommendation regarding a sentence 
for the crime in question no matter what 
race the defendant, or the victim, may be. 
"(i) Appeal in Capital Cases.— 
"(1) Review.— In any case in which the 
sentence of death is imposed under this sec- 
tion, the sentence of death shall be subject 
to review by the court of appeals upon 
appeal by the defendant. Notice of appeal 
must be filed within the time prescribed for 
appeal of judgment in section 2107 of title 
28, United States Code. An appeal under 
this section may be consolidated with an 
appeal of the judgment of conviction. Such 
review shall have priority over all other 
cases. 

"(2) Matters to be considered.— On 
review of the sentence, the court of appeals 
shall consider the record, the evidence sub- 
mitted during the trial, the information ad- 
mitted during the sentencing hearing, the 
procedures employed in the sentencing 
hearing, and the special findings returned 
under this section. 

"(3) Affirming or remanding the sen- 
tence.— The court shall affirm the sentence 
if it determines that— 

"(A) the sentence of death was not im- 
posed under the influence of passion, preju- 
dice, or any other arbitrary factor; and 

"(B) the information supports the special 
finding of the existence of every aggravat- 
ing factor upon which the sentence was 
based, together with or the failure to find 
any mitigating factors as set forth or al- 
lowed in this section. 

In all other cases the court shall remand 
the case for reconsideration under this sec- 
tion. The court of appeals shall state in 
writing the reasons for its disposition of the 
review of the sentence. 

"(4) Appointment of counsel.— In any 
post-conviction proceeding under section 
2254 or 2255 of title 28, United States Code, 
seeking to vacate or set aside a death sen- 



• i 






28364 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



tence, the court shall appoint counsel to 
represent any defendant who is or becomes 
financially unable to obtain adequate repre- 
sentation. 

"(j) Refusal to Participate by State and 
Federal Correctional Employees.— No em- 
ployee of any State department of correc- 
tions or the Federal Bureau of Prisons and 
no employee providing services to that de- 
partment or bureau under contract shall be 
required, as a condition of that employ- 
ment, or contractual obligation to be in at- 
tendance at or to participate in any execu- 
tion carried out under this section if such 
participation is contrary to the moral or re- 
ligious convictions of the employee. For pur- 
poses of this subsection, the term 'participa- 
tion in executions' includes personal prepa- 
ration of the condemned individual and the 
apparatus used for execution and supervi- 
sion of the activities of other personnel in 
carrying out such activities. 

"(k) Implementation of a Sentence of 
Death.— A person who has been sentenced 
to death pursuant to the provisions of this 
section shall be committed to the custody of 
the Attorney General until exhaustion of 
the procedures for appeal of the judgment 
of conviction and for review of the sentence. 
When the sentence is to be implemented, 
the Attorney General shall release the 
person sentenced to death to the custody of 
a United States marshal, who shall super- 
vise implementation of the sentence in the 
manner prescribed by the law of the State 
in which the sentence is imposed. If the law 
of such State does not provide for imple- 
mentation of a sentence of death, the court 
shall designate another State, the law of 
which does so provide, and the sentence 
shall be implemented in the latter State in 
the manner prescribed by such law. A sen- 
tence of death shall not be carried out upon 
a woman while she is pregnant.". 

SEC. 2. MURDER BY FEDERAL PRISONERS. 

(a) Offense.— Chapter 51 of title 18 of the 
United States Code is amended by adding 
the following new section after section 1117: 
"§ 1118. Murder by Federal prisoners 

"(a) Whoever, while confined in a Federal 
correctional institution under sentence for a 
term of life imprisonment, murders another 
shall be punished by death or by life impris- 
onment without the possibility of parole. 

"(b) For purposes of this section— 

"(1) the term 'Federal correctional institu- 
tion' means any Federal prison, Federal cor- 
rectional facility, Federal community pro- 
gram center, or Federal halfway house; 

"(2) the term 'term of life imprisonment' 
means a sentence for the term of natural 
life, a sentence commuted to natural life, an 
indeterminate term of a minimum of at 
least fifteen years and a maximum of life, or 
an unexecuted sentence of death; and 

"(3) the term 'murders' means committing 
first-degree murder or second-degree 
murder as defined by section 1111 of this 
title.". 

(b) Amendment to Chapter Analysis.— 
The chapter analysis for chapter 51 of title 
18, United States Code, is amended by 
adding at the end thereof the following: 
"1118. Murder by Federal prisoners.". 

SEC. 3. DEATH PENALTY FOR TERRORIST ACTS 
ABROAD AGAINST UNITED STATES NA- 
TIONALS. 

Section 2331(a)(1) of title 18, United 
States Code, is amended to read as follows: 

"(1) if the killing is a murder as defined in 
section 1111(a) of this title, be punished by 
death or by life imprisonment without pos- 
sibility of parole;". 



By Mr. DOLE (for Mr. Karnes): 
S. 2864. A bill to amend the Internal 
Revenue Code of 1986 to provide a re- 
fundable credit to parents for depend- 
ents under age 6, to provide liability 
reform and risk reduction for child 
care providers, to provide incentives 
for employer provided child care, and 
for other purposes; referred to the 
Committee on Finance. 
kidcare: a solution to the child care issue 
• Mr. KARNES. Mr. President, as a 
husband and father of four young 
daughters, I am concerned about the 
plight of many Nebraska families who 
are having trouble finding affordable 
quality care for their young children. 
Last week I announced and today I am 
pleased to introduce legislation to ad- 
dress this problem. I call my program 
Kidcare— standing for Karnes Infants' 
Deductible Care. It is based on these 
four principles. 

First, all children are important, 
they are primarily the responsibility 
of their parents, and they deserve 
quality care. 

Second, we should provide meaning- 
ful choices for traditional families. 
Parents should have the freedom to 
choose the kind of work they do— 
homemaking or employment outside 
the home— and the kind of child care 
best suited to their needs. 

Third, government should provide 
assistance in the form of tax relief for 
all families with young children, espe- 
cially to low- and middle-income fami- 
lies who must spend a greater portion 
of their earnings on child care ex- 
penses. 

Finally, we must recognize the im- 
portance of religious and moral values 
to society, especially to children. Gov- 
ernment policy should not discrimi- 
nate against church-sponsored care 
providers by denying them assistance 
or forcing them to sacrifice religious 
teaching as a condition of receiving as- 
sistance. 

My Kidcare Program would reform 
the current dependent care tax credit 
which allows families to claim a nonre- 
fundable credit for expenses for two 
children if both parents are employed. 
It is estimated that, in 1988, 43 per- 
cent of that credit will go to families 
earning more than $50,000 a year 
while only 23 percent will go to fami- 
lies making under $20,000. Clearly the 
credit is restrictive and unfair, since 
the neediest families cannot receive 
the benefit. 

Under Kidcare the credit would be 
available to all families, regardless of 
the number of offspring. My proposal 
would make the credit refundable so 
that the neediest families could be 
helped, and would allow the credit to 
families where one parent stays at 
home to care for the children, thereby 
sacrificing extra income. The amount 
of the credit would be increased, start- 
ing at 50 percent— instead of 30 per- 
cent—for families with incomes of 



$10,000 or less, and phasing down to 20 
percent for families with incomes of 
$40,000 or more— instead of $29,000 or 
more under current law. Single-parent 
families, who must work to support 
their youngsters or go on welfare, and 
for whom child care is a necessity, 
would receive an additional 15 percent 
credit. As a result of these changes, 
the credit would be targeted to help 
those most in need of assistance. 

My Kidcare Program includes a 
number of legal reforms which would 
ease tort liability problems faced by all 
child care providers. Federal assist- 
ance would be made available to the 
States to enable them to establish in- 
surance pools in which providers may 
participate. 

Kidcare would also provide tax relief 
for businesses that include child care 
as an option in the benefit plans they 
offer to employees and establish onsite 
child care facilities or provide credits 
to employees for offsite care. This will 
encourage the private sector to pro- 
vide child care as more and more 
mothers and young women enter the 
work force. It will also allow the em- 
ployee parent a choice in the kind of 
care for their children while they are 
on the job, without being taxed on the 
benefit. 

As you can see, Kidcare is straight- 
forward and simple. It responds direct- 
ly to the need of low- and middle- 
income families for quality child care 
and leaves the choice of provider to 
the parents. It provides tax relief to 
all families, regardless of whether 
both parents are employed or one 
parent chooses to remain at home to 
look after the children. It will make 
child care more readily available, by 
promoting employer-sponsored pro- 
grams. It will make child care more af- 
fordable, by lowering costs and ensur- 
ing competition among providers. Its 
administrative costs are low. It does 
not create another wasteful govern- 
ment program run by a huge Federal 
child care bureaucracy, as the Dodd- 
Kildee ABC bill would do. 

I believe my Kidcare proposal offers 
a reasonable profamily approach to a 
growing social problem. I shall work to 
see that it receives early consideration 
in the next Congress. 

Nebraska families should be relieved 
of the burden of child care costs, with 
the knowledge that while both parents 
are employed away from the home or 
one parent remains at home, their 
young children will receive the kind of 
care and attention they need. 

In America we are deeply concerned 
about the upbringing of our young 
children— and rightly so, for our Na- 
tion's future depends on the ability of 
families to provide for their children 
today. Parents everywhere are pre- 
pared to expend considerable sums to 
provide the best possible care for their 
children during their formative years. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28365 



My Kidcare Program will help fami- 
lies, especially low- and middle-income 
taxpayers, meet their responsibility to 
their children, their communities and 
their country, without sacrificing their 
freedom of choice.* 

By Mr. MURKOWSKI: 
S. 2865. A bill to enroll 20 individuals 
under the Alaska Native Claims Settle- 
ment Act; referred to the Committee 
on Energy and Natural Resources. 

LEGISLATION TO ENROLL CERTAIN INDIVIDUALS 
UNDER THE ALASKA NATIVE CLAIMS SETTLE- 
MENT ACT 

• Mr. MURKOWSKI. Mr. President, I 
am introducing legislation today to re- 
solve a longstanding dispute over the 
enrollment of 20 Alaska Natives under 
the Alaska Native Claims Settlement 
Act [ANCSA3. Even though these 
people have been found eligible for en- 
rollment by the Department of the In- 
terior, they have been continually 
denied enrollment by the BIA and 
thereby denied the benefits granted to 
them by Congress in the ANCSA. 

Under the regulations promulgated 
by the Secretary of the Interior to 
carry out his responsibilities under 
ANCSA, the Alaska regional solicitor 
was delegated the final authority for 
determining eligibility for ANCSA en- 
rollment. In 1984, the regional solici- 
tor reconsidered a previous denial of 
eligibility for 20 Alaska Natives and 
found them eligible contingent on the 
filing of an affidavit of Native ances- 
try. Their eligibility had been original- 
ly denied because of their inability to 
prove blood quantum. The 20 individ- 
uals obtained the required affidavit 
from the Kenai Native Association in- 
dicating that they were regarded as 
Native by their community and filed it 
with the Bureau of Indian Affairs 
[BIA]. 

This should have resulted in the en- 
rollment of these people under 
ANCSA. However, the BIA refused to 
abide by the regional solicitor's deci- 
sion and would not enroll these 
people. As a result, 13 of these people 
brought suit against the BIA to try to 
enforce the regional solicitor's deci- 
sion. 

Mr. President, the Native corpora- 
tions to which these Native people 
should be enrolled, Cook Inlet Region, 
Inc., and Kenai Native Association, did 
not oppose the court action and 
agreed that the Native plaintiffs 
ought to be enrolled and issued stock 
in the corporations. Neither corpora- 
tion opposes this legislation and can 
see no reason for continuing to deny 
stock to these individuals who have 
been found eligible for enrollment and 
who are accepted as Natives by the 
very corporations to which they will 
be enrolled. 

Following initiation of the lawsuit, 
the Assistant Secretary of the Interior 
responsible for Indian Affairs issued 
an order purporting to vacate the re- 



gional solicitor's 1984 decision. This 
action arguably denies these people 
any opportunity to benefit from the 
enrollment provisions of the recently 
enacted amendments to the ANCSA 
because they may no longer be consid- 
ered eligible for enrollment. 

Mr. President, I introduce this legis- 
lation to correct this wrong and to fur- 
ther the policy of the ANCSA to 
ensure that the settlement is accom- 
plished in "conformity with the real 
economic and social needs of the Na- 
tives and without litigation." The reg- 
ulations under which the regional so- 
licitor acted have now been withdrawn 
and the circumstances which have led 
to this conflict are incapable of being 
repeated. These individuals are the 
only people who have been determined 
eligible for enrollment by the Interior 
Department and who have not been 
subsequently enrolled. This legislation 
will break this unfortunate deadlock 
and further the purposes of ANCSA. 

Mr. President, I ask unanimous con- 
sent that the text of this bill be print- 
ed in the Record following my state- 
ment. 

There being no objection, the bill 
was ordered to be printed in the 
Record, as follows: 

S. 2865 
Be it enacted by the Senate and House of 
Representatives of the United States of 
America in Congress assembled, 

Notwithstanding any other provision of 
law, the Secretary of the Interior is author- 
ized and directed to enroll the following 
named individuals as Natives under the 
Alaska Native Claims Settlement Act 
(Public Law 92-203): Marilyn Jean (Warren) 
Sanchez, Theresa A. (Warren) Forbes, Linda 
Graham, Carol Graham, Debra (Sellers) 
Page, Glen Sellers, David P. Schmalzried, 
Odman H. Schmalzried, Carol Guzialek, 
Corbin Kooly, Charmaine I. (Warren) 
Forbes, John A. Warren, Jr., Phillip 
Graham, Sharon Graham, Wanda (Sellers) 
Clancy, Georgia A. (Schmalzried) Flood, 
Rhonda S. (Schmalzried) Koski, Paula Gu- 
zialek, Pamela Kooly, and Darrell Kooly. 
Each individual is entitled to receive 100 
shares of stock in the Kenai Natives Asso- 
ciation, and Cook Inlet Region, Inc. and 
such other benefits as the boards of direc- 
tors of those corporations may approve.* 

By Mr. LAUTENBERG: 
S.J. Res. 393. Joint resolution desig- 
nating December 7, 1988, as "National 
Pearl Harbor Remembrance Day" on 
the occasion of the anniversary of the 
attack on Pearl Harbor; referred to 
the Committee on the Judiciary. 

NATIONAL PEARL HARBOR REMEMBRANCE DAY 

• Mr. LAUTENBERG. Mr. President, 
today I am introducing a resolution to 
designate December 7, 1988, the 47th 
anniversary of the attack on Pearl 
Harbor, as "National Pearl Harbor Re- 
membrance Day." 

This resolution also authorizes and 
requests the President to issue a proc- 
lamation calling upon the people of 
the United States to observe this 
solemn occasion with appropriate cere- 



monies and activities, and pledge our 
strong resolve to defend this Nation 
and its allies from all future aggres- 
sion. 

I would like to commend the New 
Jersey members of the Pearl Harbor 
Survivors Association, particularly Lee 
Goldfarb, the State chairman, and the 
approximately 10,000 members 
throughout the country, for their 
active interest and support in com- 
memorating this 47th anniversary 
through a Presidential proclamation 
of National Pearl Harbor Remem- 
brance Day. 

On December 7, 1941, "a date which 
will live in infamy," while talks be- 
tween Japanese and American diplo- 
mats were going on in Washington, 
the United States was attacked by the 
Imperial Japanese Navy and Air 
Force. Pearl Harbor was caught totally 
unprepared. The blow was deliberately 
planned for Sunday morning, when 
the ships of the Pacific Fleet were 
moored in perfect alignment, and their 
crews were ashore, having breakfast or 
relaxing on board. There was no ad- 
vance warning. 

About 360 Japanese planes attacked 
the Pacific Fleet units at the naval 
base, and army aircraft at Hickam 
Field and other nearby military instal- 
lations. The surprise attack, launched 
entirely without provocation, took the 
lives of 2,403 Americans, and wounded 
1,178. Some of those lost were civil- 
ians. 

Fortunately, no aircraft carriers 
were tied up at the base during the 
attack. When the assault ended nearly 
2 hours later, the Pacific Fleet had 
lost eight battleships, three light 
cruisers, three destroyers, and four 
other vessels. The attack also de- 
stroyed about 170 U.S. planes. The 
Japanese had concentrated on ships 
and planes, leaving repair facilities, 
the submarine base, and fuel oil short- 
age facilities relatively undamaged. 

In short, the attack had dealt the 
Pacific Fleet and Hawaii's air defense 
a devastating blow. In less than 2 
hours, the Japanese had crippled the 
Pacific Fleet and undermined Ameri- 
ca's strategic position in the Pacific. 

The unification of the country 
under the impact was swift. It was the 
first time in U.S. history that we had 
been attacked first, and it wiped away 
the last vestige of isolationist senti- 
ment. The entire country stood behind 
the President and gave him whole- 
hearted support. The attack united 
U.S. public opinion, and propelled the 
United States into World War II. At 
4:10 p.m., Monday, December 8, 1941, 
the United States declared war on the 
Japanese. 

As "Remember Pearl Harbor" 
became the American war cry 
throughout World War II, so today we 
must "Remember Pearl Harbor." We 
must recall and pay tribute to those 









28366 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



who died in that tragedy, and we must 
remember so that we will never be 
caught short or unprepared again. 

Mr. President, a similar resolution I 
introduced in the 100th Congress to 
designate December 7, 1987, as "Na- 
tional Pearl Harbor Remembrance 
Day" was approved unanimously in 
the House and Senate and became 
Public Law 100-183. But that law was 
effective for only 1 year. 

I ask unanimous consent that a copy 
of the joint resolution appear in the 
Record following my remarks, and I 
urge my colleagues to support this res- 
olution. 

There being no objection, the resolu- 
tion was ordered to be printed in the 
Record, as follows: 

S. J. Res. 393 

Resolved by the Senate and House of Rep- 
resentatives of the United States of America 
in Congress assembled, 

Whereas on the morning of December 7, 
1941, the Imperial Japanese Navy and Air 
Force launched an unprovoked surprise 
attack upon units of the Armed Forces of 
the United States stationed at Pearl Harbor, 
Hawaii; 

Whereas over two thousand four hundred 
citizens of the United States were killed in 
action and one thousand one hundred and 
seventy-eight were wounded in this attack; 

Whereas President Franklin Delano Roo- 
sevelt referred to the date of the attack as 
"a date that will live in infamy"; 

Whereas the attack on Pearl Harbor 
marked the entry of this Nation into World 
War II: 

Whereas the people of the United States 
owe a tremendous debt of gratitude to all 
members of our Armed Forces who served at 
Pearl Harbor, in the Pacific Theater of 
World War II, and in all other theaters of 
action of that war; and 

Whereas the veterans of World War II 
and all other people of the United States 
will commemorate December 7, 1988, in re- 
membrance of this tragic attack on Pearl 
Harbor: Now, therefore, be it 

Resolved by the Senate and House of Rep- 
resentatives of the United States of America 
in Congress assembled, That December 7, 
1988, the anniversary of the attack on Pearl 
Harbor, is designated as "National Pearl 
Harbor Remembrance Day" and the Presi- 
dent of the United States is authorized and 
requested to issue a proclamation calling 
upon the people of the United States— 

(1) to observe this solemn occasion with 
appropriate ceremonies and activities; and 

(2) to pledge eternal vigilance and strong 
resolve to defend this Nation and its allies 
from all future aggression.* 



ADDITIONAL COSPONSORS 

S. 702 

At the request of Mr. Simon, the 
name of the Senator from New Mexico 
[Mr. Bingaman] was added as a co- 
sponsor of S. 702, a bill to provide for 
the collection of data about crimes 
motivated by racial, religious, or 
ethnic hatred. 

S. 1301 

At the request of Mr. Pell, his name 
was added as a cosponsor of S. 1301, a 
bill to amend title 17, United States 



Code, to implement the Berne Conven- 
tion for the Protection of Literary and 
Artistic Works, as revised on July 24, 
1971, and for other purposes. 

S. 1429 

At the request of Mr. Lautenberg, 
the name of the Senator from Penn- 
sylvania [Mr. Heinz] was added as co- 
sponsor of S. 1429, a bill to improve 
the Environmental Protection Agency 
data collection and dissemination re- 
garding reduction of toxic chemical 
emissions across all media, to assist 
States in providing information and 
technical assistance about waste re- 
duction, and for other purposes. 

S. 2124 

At the request of Mr. Boschwitz, 
the name of the Senator from Califor- 
nia [Mr. Wilson] was added as a co- 
sponsor of S. 2124, a bill to expand the 
availability of child care, and for other 
purposes. 

S. 2326 

At the request of Mr. McCain, the 
name of the Senator from Alaska [Mr. 
Murkowski] was added as a cosponsor 
of S. 2326, a bill to enhance the Feder- 
al Trade Commission's ability to pre- 
vent consumer fraud. 

S. 2642 

At the request of Mr. Pell the name 
of the Senator from New Jersey [Mr. 
Bradley] was added as a cosponsor of 
S. 2642, a bill to amend the Elementa- 
ry and Secondary Education Act of 
1965 to provide for National Geogra- 
phy Studies Centers. 

S. 2702 

At the request of Mr. Levin the 
name of the Senator from Massachu- 
setts [Mr. Kennedy] was added as a 
cosponsor of S. 2702, a bill to provide 
OPIC insurance, reinsurance and fi- 
nancing to eligible projects in Poland. 

S. 2796 

At the request of Mr. Nunn, the 
name of the Senator from Tennessee 
[Mr. Gore] was added as a cosponsor 
of S. 2796, a bill to authorize funding 
for the Martin Luther King, Jr., Fed- 
eral Holiday Commission. 

S. 2797 

At the request of Mr. Humphrey, the 
names of the Senator from Nevada 
[Mr. Reid], and the Senator from 
Alaska [Mr. Stevens] were added as 
cosponsors of S. 2797, a bill to amend 
title II of the Social Security Act to 
remove the dependency test applicable 
to certain children adopted by Social 
Security beneficiaries and to make im- 
provements in the administration of 
the Social Security Program. 

S. 2859 

At the request of Mr. Domenici, the 
name of the Senator from New Mexico 
[Mr. Bingaman] was added as a co- 
sponsor of S. 2859, a bill to clarify the 
rules concerning the unconventional 
fuels credit with respect to gas pro- 
duced from a tight formation. 



SENATE JOINT RESOLUTION 296 

At the request of Mr. Shelby, the 
names of the Senator from Colorado 
[Mr. Wirth], the Senator from New 
Jersey [Mr. Lautenberg], the Senator 
from New York [Mr. D'Amato], the 
Senator from Arkansas [Mr. Pryor], 
the Senator from California [Mr. 
Cranston], and the Senator from Ne- 
braska [Mr. Exon] were added as co- 
sponsors of Senate Joint Resolution 
296, a joint resolution designating 
April 1989 as "National Outdoor 
Power Equipment Safety Month." 

SENATE JOINT RESOLUTION 307 

At the request of Mr. Riegle, the 
names of the Senator from Oklahoma 
[Mr. Boren], the Senator from Ne- 
braska [Mr. Exon], and the Senator 
from North Dakota [Mr. Conrad] were 
added as cosponsors of Senate Joint 
Resolution 307, a joint resolution to 
designate the decade beginning Janu- 
ary 1, 1988, as the "Decade of the 
Brain." 

SENATE JOINT RESOLUTION 309 

At the request of Mr. Wilson, the 
name of the Senator from Idaho [Mr. 
Symms] was added as a cosponsor of 
Senate Joint Resolution 309, a joint 
resolution designating the month of 
May as "National Asparagus Month." 

SENATE JOINT RESOLUTION 340 

At the request of Mr. Packwood, the 
name of the Senator from Louisiana 
[Mr. Breaux] was added as a cospon- 
sor of Senate Joint Resolution 340, a 
designating November 27 through De- 
cember 3, 1988, as "National Sir Win- 
ston Churchill Recognition Week." 

SENATE JOINT RESOLUTION 354 

At the request of Mr. Helms, the 
name of the Senator from Delaware 
[Mr. Biden] was added as a cosponsor 
of Senate Joint Resolution 354, a joint 
resolution to designate November 6 
through 12, 1988, as "National Farm 
Broadcasters Week." 

SENATE JOINT RESOLUTION 363 

At the request of Mr. Sarbanes, the 
name of the Senator from Wyoming 
[Mr. Simpson] was added as a cospon- 
sor of Senate Joint Resolution 363, a 
joint resolution designating November 
28 through December 2, 1988, as "Vo- 
cational-Technical Education Week." 

SENATE JOINT RESOLUTION 368 

At the request of Mr. Pell, the name 
of the Senator from Vermont [Mr. 
Stafford] was added as a cosponsor of 
Senate Joint Resolution 368, a joint 
resolution to establish a National 
Commission on Human Resources. 

SENATE JOINT RESOLUTION 372 

At the request of Mr. Hatch, the 
name of the Senator from Michigan 
[Mr. Riegle] was added as a cosponsor 
of Senate Joint Resolution 372, a joint 
resolution to designate the week be- 
ginning November 21, 1988, through 
November 27, 1988, as "National Adop- 
tion Week." 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28367 



SENATE JOINT RESOLUTION 373 

At the request of Mr. Byrd, the 
names of the Senator from Oklahoma 
[Mr. Boren], the Senator from Utah 
[Mr. Garn], and the Senator from 
Maryland [Mr. Sarbanes] were added 
as cosponsors of Senate Joint Resolu- 
tion 373, a joint resolution to desig- 
nate the week beginning November 13, 
1988, as "National Craniofacial De- 
formity Awareness Week." 

SENATE JOINT RESOLUTION 387 

At the request of Mr. Simon, the 
name of the Senator from Alaska [Mr. 
Stevens] was added as a cosponsor of 
Senate Joint Resolution 387, a joint 
resolution to express the sense of the 
Senate with respect to continuing re- 
ductions in the Medicare Program. 

SENATE CONCURRENT RESOLUTION 127 

At the request of Mr. Wilson, the 
names of the Senator from Minnesota 
[Mr. Boschwitz], the Senator from 
Michigan [Mr. Riegle], the Senator 
from Virginia [Mr. Trible], and the 
Senator from Washington [Mr. Evans] 
were added as cosponsors of Senate 
Concurrent Resolution 127, a concur- 
rent resolution expressing the sense of 
the Congress concerning support for 
Amateur Radio and Amateur Radio 
frequency allocations vital for Public 
Safety purposes. 

SENATE CONCURRENT RESOLUTION 152 

At the request of Mr. Lugar, the 
name of the Senator from North Caro- 
lina [Mr. Helms] was added as a co- 
sponsor of Senate Concurrent Resolu- 
tion 152, a concurrent resolution com- 
mending the Republic of Korea in 
hosting the Games of the XXIV 
Olympiad, and for other purposes. 



SENATE CONCURRENT RESOLU- 
TION 153— TO CORRECT THE 
ENROLLMENT OF S. 659 
Mr. BYRD (for Mr. Leahy) submit- 
ted the following concurrent resolu- 
tion; which considered and agreed to: 
S. Con. Res. 153 
Resolved by the Senate (the House of Rep- 
resentatives concurring), That, in the en- 
rollment of the bill (S. 659), an Act to 
amend the Federal Insecticide, Fungicide, 
and Rodenticide Act, and for other pur- 
poses, the Secretary of the Senate shall 
make the following corrections: 

(1) In section 2(ff)(l)(B) of the Federal In- 
secticide, Fungicide, and Rodenticide Act (as 
added by section 101), strike out "it must" 
and insert "must". 

(2) In section 4(c)(2)(A) of the Federal In- 
secticide, Fungicide, and Rodenticide Act (as 
added by section 102(a) and as designated 
by section 801(q)(2)), strike out "such date" 
and insert in lieu thereof "such effective 
date". 

(3) In section 4(f)(1)(A) of the Federal In- 
secticide, Fungicide, and Rodenticide Act (as 
added by section 102(a) and as designated 
by section 801(q)(2)), strike out "(f)(1)" and 
insert in lieu thereof "(e)(1)". 

(4) In section 4(K)(5)(B) of the Federal 
Insecticide, Fungicide, and Rodenticide Act 
(as added by section 102(a) and as designat- 
ed by section 801(q)(2)), strike out "of such 



funds" and insert in lieu thereof "from such 
fund". 

(5) In section 6(f)(2) of the Federal Insec- 
ticide, Fungicide, and Rodenticide Act (as 
added by section 201), strike out "(d)(4) or 
(e)(5)(A)" and insert in lieu thereof "(c)(4) 
or (d)(5)(A)". 

(6) Section 302(a) is amended to read as 
follows: 

"(a) In General.— Section 9(a) (7 U.S.C. 
136g(a)) is amended— 

"(1) in the first sentence— 

"(A) by inserting '(1)' before 'For', 

"(B) by inserting after 'employees' the fol- 
lowing: 'of the Environmental Protection 
Agency or of any State', 

"(C) by striking out 'at reasoanble times,' 
and inserting in lieu thereof the following: 
'at reasonable times (A)', and 

"(D) by inserting before the period at the 
end the following: ', or (B) any place where 
there is being held any pesticide the regis- 
tration of which has been suspended or can- 
celed for the purpose of determining compli- 
ance with section 19'; and 

"(2) in the second sentence, by inserting 
'(2)' before 'Before'.". 

(7) In section 12(a)(2)(B) of the Federal 
Insecticide, Fungicide, and Rodenticide Act 
(as amended by section 603(2XA))— 

(A) strike out "4, 5, 7, 8, or 19" In clause 
(i) and insert in lieu thereof "5, 7, 8, 11, or 
19", and 

(B) strike out "4, 5, 6, 7, 8, or 19" in clause 
(ii) and insert in lieu thereof "5, 6, 7, 8, 11, 
or 19". 

(8) In section 14(b)(1) of the Federal In- 
secticide, Fungicide, and Rodenticide Act (as 
amended by section 604), strike out "that" 
each place it occurs and insert in lieu there- 
of "who". 

(9) In section 19(f)(l)(B)(iv) of the Feder- 
al Insecticide, Fungicide, and Rodenticide 
Act (as added by section 403), strike out 
"the Resource Conservation and Recovery 
Act of 1976" and insert in lieu thereof "the 
Solid Waste Disposal Act". 

(10) In section 31 of the Federal Insecti- 
cide, Fungicide and Rodenticide Act (as 
amended by section 701), strike out "sec- 
tions" and insert in lieu thereof "section". 

(11) In the amendment to section 
3(c)(7)(C) of the Federal Insecticide, Fungi- 
cide, and Rodenticide Act made by section 
801(b)(6)(D), insert a comma before "That". 

(12) In section 801(b)— 

(A) amend paragraph (2) to read as fol- 
lows: 

"(2) in subsection (cXIXDXi)— 

"(A) by striking out "With' and inserting 
in lieu thereof 'with', and 

"(B) by striking out '; Provided, That' and 
inserting in lieu thereof ', except that';", 

(B) amend paragraph (3) to read as fol- 
lows: 

"(3) in subsection (cXIXDXii), by striking 
out 'subparagraph (DXi) of this paragraph' 
and inserting in lieu thereof 'clause (i)';", 
and 

(C) amend paragraph (4) to read as fol- 
lows: 

"(4) in subsection (cXIXDXiii), by striking 
out 'subparagraphs (DXi) and (DXii) of this 
paragraph' and inserting in lieu thereof 
'clauses (i) and (ii)';". 

(13) In section 801(b), redesignate para- 
graphs (8), (9), and (10) as paragraphs (7), 
(8), and (9), respectively. 

(14) In section 801(q)(l), strike out "(B) 
Conforming Amendments.—" and insert in 
lieu thereof "(D)". 

(15) In the table of contents of the Feder- 
al Insecticide, Fungicide, and Rodenticide 
Act (as amended by section 802— 



(A) in the item relating to section 6(f), 
strike out "(3) Existing stocks." and "(4) Ad- 
ditional information.", 

(B) in the item relating to section 18, 
insert "and State" after "Federal", 

(C) in the item relating to section 19— 



SENATE RESOLUTION 487— EX- 
PRESSING THE SENSE OF THE 
SENATE WITH RESPECT TO 
LIMITING THE SALE OF ARMS 
TO NATIONS IN THE MIDEAST 

Mr. SPECTER (for himself, Mr. 
DeConcini, and Mr. Inouye) submit- 
ted the following resolution; which 
was referred to the Committee on For- 
eign Relations: 

S. Res. 487 

Resolved, That it is the sense of the 
Senate that the President be urged to un- 
dertake discussions and negotiations with 
other nations which are principal suppliers 
of arms in the Mideast for the purpose of 
limiting, to the maximum extent possible, 
the sale of arms to nations in the Mideast. 

Mr. SPECTER. Mr. President, I am 
introducing a resolution that it is the 
sense of the Senate that the President 
be urged to undertake discussions and 
negotiations with other nations which 
are principal suppliers of arms to the 
Mideast for the purpose of eliminating 
to the maximum extent possible the 
sale of arms to nations in the Mideast. 

Mr. President, I introduced this leg- 
islation on behalf of Senator DeCon- 
cini, Senator Inouye, and Senator 
Kasten. 

The purpose of this resolution is to 
be certain that the record is complete 
on the sense of the Senate on this im- 
portant subject. 

On Friday last on consideration of a 
conference report on the foreign aid 
bill this Senator introduced this iden- 
tical resolution with the same cospon- 
sors and it was adopted by the Senate 
on a voice vote. 

When the conference report came 
back later to the Senate, this resolu- 
tion, the sense-of-the-Senate resolu- 
tion, was attached to an amendment 
which had been deleted by the House 
of Representatives. I was advised at 
that time by the distinguished Senator 
from Hawaii, Senator Inouye, the 
chairman of the Foreign Operations 
Subcommittee, that the House had 
sought some way to separate this 
sense-of-the-Senate resolution but 
could not do so as a procedural matter. 
Senator Inouye then suggested to me 
that the resolution be introduced as a 
freestanding resolution with his assur- 
ance to do everything possible to expe- 
dite its consideration and passage by 
the U.S. Senate which I am doing at 
the present time. 

Mr. President, I am deeply con- 
cerned about the administration's 
latest sale of sophisticated arms to 
Kuwait. The Reagan administration's 
efforts to sell 40 F/A-18 aircraft and 
over 800 missiles worth $1.9 billion to 









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CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



Kuwait represents a policy based on 
the bland assertion that if we do not 
sell arms somebody else will. This atti- 
tude only results in more and more 
sales of advanced weaponry and it is 
time that we let the world know that 
we intend to take a lead role to put an 
end to the proliferation of arms sales 
in the Middle East. 

Mr. President, the announcement in 
July of a 10-year, $29 billion arms deal 
between Great Britain and Saudi 
Arabia is the most recent example of 
world powers feeding the insatiable 
appetite of Middle East countries for 
expensive, sophisticated and danger- 
ous weapons. The Saudi package con- 
tains highly sophisticated offensive 
weapons, and came on the heels of the 
covert Saudi acquisition of Chinese 
CSS-2 long-range, surface-to-surface 
missiles. In addition to this, in a deal 
seen primarily as a warning to the U.S. 
Congress not to block a $1.9 billion air- 
craft and missile sale to Kuwait, the 
Gulf Sheikdom announced it will pur- 
chase 245 armored personnel carriers 
worth $300 million from the Soviet 
Union. 

Mr. President, the proliferation of 
sophisticated weapons in the volatile 
Middle East is not in the long-term in- 
terests of the United States, nor of the 
countries making these sales. The 
focus of U.S. efforts should be to stop 
the regional arms race, not feed it. 
Over the years, Congress has evolved a 
set of sensible standards for the sale of 
weapons to the Middle East which in- 
clude some of the following: 

Ensure America's most sophisticated 
military technology and advanced tac- 
tics are not shared with America's en- 
emies—as occurred when Stinger mis- 
siles reportedly fell into the hands of 
Iranians and Hezbollah extremists in 
Lebanon. 

Inhibit the runaway escalation of 
the Middle East arms race. In 1987, 
Arab states, excluding Egypt, budg- 
eted $42.66 billion for arms— 10 times 
the total Israeli defense budget. 

Preserve Israel's qualitative military 
edge in the face of unending hostility 
of its neighbors. The unchecked sale 
of American state-of-the-art weapon- 
ry—the best in the world— to nations 
at war with Israel blunts that edge. 

Mr. President, the constitutionally 
guaranteed right of Congress to par- 
ticipate with the executive branch in 
the formulation of foreign policy has 
ensured that American arms sales 
abroad to not undermine our interests 
or allies. By contrast, many nations 
which have adopted a cash-and-carry 
attitude that ignores moral and politi- 
cal considerations and permits the sale 
of weapons to opposite sides of Con- 
flicts. China and Prance, for example, 
indiscriminately sell arms to Iran and 
Iraq. 

Mr. President, arms sales should 
meet a threat, not create a new one. 
The British sale to Saudi Arabia of 



Tornado ground-attack aircraft and 
the Chinese sale of surface-to-surface 
ballistic missiles to Saudi Arabia, and 
reportedly to Syria, Iran, Iraq, Egypt, 
et al., exceed the legitimate security 
needs of the recipients while fueling 
the arms race. Now is the time for the 
United States to persuade China, the 
Soviet Union and our Western allies to 
work for peace instead of peddling 
their increasingly lethal wares to this 
most volatile and unpredictable of re- 
gions. 

Mr. President, I would like to men- 
tion for a moment the United States 
sale to Kuwait. The sale of 300 Maver- 
ick G missiles was a mistake in my 
opinion. The Maverick G missile is a 
unique weapon. It is a day /night, in- 
frared, heatseeking, "fire-and-forget 
"weapon. It has tremendous impact, 
incorporating a 300-pound warhead 
that can be used to destroy ships as 
well as heavily-fortified fixed installa- 
tions. The Maverick missile is not a 
ballistic missile, but nevertheless, it is 
a highly sophisticated state-of-the-art 
missile and has never been sold in the 
Middle East region before. If the 
United States is going to set an exam- 
ple on limiting arms sales to this 
region, we should take the lead in cur- 
tailing arms sales and working with 
other nations which are major suppli- 
ers of arms in the Mideast to limit the 
sale of arms to these nations. 

Mr. President, the entire issue of 
missile proliferation is a serious one. 
The United States should see this 
period as an opportunity to reduce 
tension in the Middle East by persuad- 
ing its Western allies, as well as China 
and the Soviet Union, to restrict the 
sale of sophisticated weaponry. Ameri- 
can policy in the Middle East should 
seek every chance to work for peace— 
and not to sell the tools of war. I be- 
lieve that it is imperative that the 
United States intensify its efforts with 
other nations to establish internation- 
al standards to limit arms sales so that 
such sales will not be made simply be- 
cause someone else will make the sale 
if we do not. Accordingly, I urge my 
colleagues to join me in this resolution 
to work with other nations on this 
vital issue. 



488— PRO- 
EMPLOY- 
IN THE 



SENATE RESOLUTION 

VIDING FOR FAIR 

MENT PRACTICES 

SENATE 

Mr. McCAIN submitted the follow- 
ing resolution; which was referred to 
the Committee on Rules and Adminis- 
tration: 

S. Res. 488 

Resolved, 

SECTION 1. SHORT TITLE. 

This resolution may be cited as the "Fair 
Employment Practices Resolution". 



SEC. 2. NONDISCRIMINATION IN SENATE EMPLOY- 
MENT. 

(a) In General.— Personnel actions affect- 
ing employment positions in the Senate 
shall be made free from discrimination 
based on race, color, national origin, reli- 
gion, sex (including marital or parental 
status), handicap or age. 

(b) Interpretations.— Interpretations 
under subsection (a) shall reflect the princi- 
ples of current law, as generally applicable 
to employment. 

(c) Construction.— Subsection (a) does 
not prohibit the taking into consideration 
of- 

(1) the domicile of an individual with re- 
spect to a position under the administrative, 
legislative and clerical assistance allowance; 
or 

(2) the political affiliation of an individual 
with respect to a position under the admin- 
istrative, legislative and clerical assistance 
allowance or a position on the staff of a 
committee. 

SEC 3. PROCEDURE FOR CONSIDERATION OF AL- 
LEGED VIOLATIONS. 

The procedure for consideration of alleged 
violations of section 2 consists of 3 steps as 
follows: 

(1) Step I, Counseling and Mediation, as 
set forth in section 5. 

(2) Step II, Formal Complaint, Hearing, 
and Review by the Office of Fair Employ- 
ment Practices, as set forth in section 6. 

(3) Step III, Final Review by Review 
Panel, as set forth in section 7. 

SEC 4. ESTABLISHMENT OF OFFICE OF FAIR EM- 
PLOYMENT PRACTICES. 

There is established an Office of Fair Em- 
ployment Practices (hereafter in this resolu- 
tion referred to as the "Office"), which 
shall carry out functions assigned under 
this resolution. Employees of the Office 
shall be appointed by, and serve at the 
pleasure of, the Chairman and ranking mi- 
nority party member of the Committee on 
Rules, acting jointly, and shall be under the 
administrative direction of the Secretary of 
the Senate. The Office shall be located in 
the District of Columbia and shall begin op- 
eration not more than 30 days after the 
date on which the resolution is agreed to. 

SEC 5. STEP I: COUNSELING AND MEDIATION. 

(a) Counseling.— An individual aggrieved 
by an alleged violation of section 2 may re- 
quest counseling by counselors in the 
Office, who shall provide information with 
respect to rights and related matters under 
that section. A request for counseling shall 
be made not later than 180 days after the 
alleged violation and may be oral or written, 
at the option of the individual. The period 
for counseling is 30 days. The Office may 
not notify the employing authority of the 
counseling before the beginning of media- 
tion or the filing of the formal complaint, 
whichever occurs first. 

(b) Mediation.— If, after counseling, the 
individual desires to proceed, the Office 
shall attempt to resolve the alleged viola- 
tion through mediation between the individ- 
ual and the employing authority. 

SEC 6. STEP II: FORMAL COMPLAINT, HEARING 
AND REVIEW BY THE OFFICE OF FAIR 
EMPLOYMENT PRACTICES. 

(a) Formal Complaint and Request for 
Hearing.— Not later than 15 days after the 
end of the counseling period, the individual 
may file a formal complaint with the Office. 
Not later than 10 days after filing the 
formal complaint, the individual may file 
with the office a written request for a hear- 
ing on the complaint. 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28369 



(b) Hearing— The hearing shall be con- 
ducted— 

(1) not later than ten days after filing of 
the written request under subsection (a), 
except that the Office may authorize a 
delay of not more than 30 days for investi- 
gation; 

(2) on the record by an employee of the 
Office; and 

(3) to the greatest extent practicable, in 
accordance with the principles and proce- 
dures set forth in sections 555 and 556 of 
title 5, United States Code. 

(c) Decision— Not later than 20 days 
after the hearing, the Office shall issue a 
written decision to the parites. The decision 
shall clearly state the issues raised by the 
complaint, and shall contain a determina- 
tion as to whether a violation of section 2 
has occurred. 

SEC. 7. STEP III: FINAL REVIEW BY REVIEW PANEL. 

(a) In General.— Not later than 20 days 
after issuance of the decision under section 
6, any party may seek final review of the de- 
cision by filing a written request with the 
Office. The final review shall be conducted 
by a penal constituted at the beginning of 
each Congress and composed of— 

(1) 2 elected officers of the Senate, ap- 
pointed by the Majority Leader of the 
Senate; 

(2) 2 employees of the Senate, appointed 
by the minority leader of the Senate. 

(3)2 members of the Committee on Rules, 
(one of whom shall be appointed as chair- 
man of the panel), appointed by the Chair- 
man of that Committee; and 

(4) 2 members of the Committee on Rules, 
appointed by the ranking minority party 
member of that Committee. 

if any member of the panel withdraws from 
a particular review, the appointing author- 
ity for such member shall appoint another 
officer, employee, or Senator, as the case 
may be, to be a temporary member of the 
panel for purposes of that review only. 

(b) Review and Decision.— The review 
under this section shall consist of a hearing 
(conducted in the manner described in sec- 
tion 6(b)(3)), if such hearing is considered 
necessary by the panel, and an examination 
of the record, together with any statements 
or other documents the panel deems neces- 
sary. A tie vote by the panel is an affirma- 
tion of the decision of the Office. The panel 
shall complete the review and submit a writ- 
ten decision to the parties and to the Com- 
mittee on Rules not later than 30 days after 
filing of the request under subsection (a). 

SEC. 8. RESOLUTION BY AGREEMENT. 

If, after a formal complaint is filed under 
section 6, the parties resolve the issues in- 
volved, the parties shall enter into a written 
agreement, which shall be effective— 

(1) in the case of a matter under review by 
the Office under section 6, if approved by 
the Office; and 

(2) in the case of a matter under review by 
a panel under section 7, if approved by the 
panel. 

SEC. 9. REMEDIES. 

The Office or a review panel, as the case 
may be, may order the following remedies: 

(1) Monetary compensation, to be paid 
from the contingent fund of the Senate. 

(2) In the case of a serious violation, a 
payment in addition to compensation under 
paragraph (2), to be paid from the adminis- 
trative, legislative and clerical assistance al- 
lowance of a Senator, or from personnel 
funds of a committee of the Senate or other 
entity, as appropriate. 

(3) Injunctive relief. 



(4) Costs and attorney fees. 

(5) Employment, reinstatement to employ- 
ment, or promotion (with or without back 
pay). 

SEC. 10. COSTS OF ATTENDING HEARINGS. 

An individual with respect to whom a 
hearing is held under this resolution shall 
be reimbursed for actual and reasonable 
costs of attending the hearing, if the indi- 
vidual resides outside the District of Colum- 
bia. 

SEC. 11. PROHIBITION OF INTIMIDATION. 

Any intimidation of, or reprisal against, 
any person by an employing authority be- 
cause of the exercise of a right under this 
resolution is a violation of section 2. 

SEC. 12. CLOSED HEARINGS AND CONFIDENTIAL- 
ITY. 

All hearings under this resolution shall be 
closed. All information relating to any pro- 
cedure under this resolution is confidential, 
except that a decision of the office under 
section 6 or a decision of a review panel 
under section 7 shall be published, if the de- 
cision constitutes a final disposition of the 
matter. 

SEC 13. EXCLUSIVITY OF PROCEDURES AND REME- 
DIES. 

The procedures and remedies under this 
resolution are exclusive except to the extent 
that the Rules of the Senate and the Rules 
of the Senate Committee on Ethics provide 
for additional procedures and remedies. 

SEC. 14. DEFINITIONS. 

As used in this resolution— 

(1) the term "employment position" 
means, with respect to the Senate, a posi- 
tion the pay for which is disbursed by the 
Secretary of the Senate, and any employ- 
ment position in a legislative service organi- 
zation or other entity that is paid through 
funds derived from the administrative, legis- 
lative and clerical allowance; 

(2) the term "employing authority" means 
the Senator or elected officer of the Senate 
with the power to appoint the employee; 

(3) the term "Senator" means a Senator in 
the Congress; 

(4) the term "elected officer of the 
Senate" means an elected officer of the 
Senate (other than the President Pro Tem- 
pore, the Deputy President Pro Tempore 
and the Chaplain). 

Mr. McCAIN. Mr. President, I rise to 
introduce legislation that would pro- 
vide for fair employment practices in 
the Senate. For too long, the Senate 
has operated under rules different 
from those imposed on other Ameri- 
can employers. For too long, the 
Senate has exempted itself from dis- 
crimination rules concerning race, 
color, national origin, religion, sex, in- 
cluding marital or parental status, 
handicap, and age. 

I think we have some questions to 
ask ourselves as we consider this situa- 
tion. One is: Are we really fair to our 
employees? Is it really fair for them 
not to have the same kinds of safe- 
guards enjoyed by all other citizens 
throughout the country? I think we 
also have to ask ourselves how this sit- 
uation affects our standing in the eyes 
of the American people; should we 
subject others to standards to which 
we do not hold ourselves? 

Americans who hear that our em- 
ployees are not given the same safe- 
guards and protections as every other 



citizen, are, first, confused and, 
second, are dissatisfied with the expla- 
nation that somehow the legislative 
branch, for constitutional reasons, is 
correct in exempting itself from those 
standards. 

Can we not develop a set of rules, a 
set of guidelines, a set of protections 
for our employees, which would 
achieve the goals of providing for fair 
employment practices in the legisla- 
tive branch and at the same time not 
erode the separation of powers in our 
Government? 

Mr. President, this is not a new 
issue. Senator Glenn, my esteemed 
colleague from Ohio, Senator Bosch- 
witz, Senator Levin and others have 
done pioneering work on this issue. 
Hearings have been held in years past. 
I am assured there will be hearings in 
the future. I am introducing this legis- 
lation in hopes of getting the process 
moving. 

Just yesterday the other body 
passed legislation by an overwhelming 
vote of 408 to 12 enacting fair employ- 
ment practices in the House. Mr. 
President, it is incumbent upon the 
Senate to pass similar rules and do it 
as soon as possible. My legislation is 
modeled on the House bill. It has a 
three-step process. The first step is a 
counseling board; the second is a 
review board to render decisions; and 
the third step is a final review board 
empowered to levy penalties. 

There was an article in this morn- 
ing's Washington Post concerning the 
House vote to protect its staff rights. 

Mr. President, I ask unanimous con- 
sent that the article be printed in the 
Record to better explain the mecha- 
nisms entailed in this legislation. 

There being no objection, the article 
was ordered to be printed in the 
Record, as follows: 

[Prom the Washington Post, Oct. 5, 1988] 

House Votes To Protect Staff Rights- 
Bias Is Prohibited for the First Time in 
Hill Employment 

(By Don Phillips) 
The House voted for the first time yester- 
day to extend to its employees some of the 
same employment protections long enjoyed 
by other Americans— protection against dis- 
crimination based on race, color, national 
origin, religion, sex, handicap or age. 

Reacting to news stories of sexual harass- 
ment and other cases of abuse in congres- 
sional offices, the House voted 408 to 12 to 
give the protections of the Civil Rights Act 
of 1964 to the 12,137 persons who work for 
House members, committees or in various 
Capitol offices. 

The House also approved legislation yes- 
terday to strengthen protections for federal 
employees who expose waste and misman- 
agement. The "whistle-blower" measure is 
expected to pass the Senate and be signed 
by the president. [Details on Page A23.] 

The House vote on its employment prac- 
tices does not affect Capitol employees who 
are not on the House payroll. Some Capitol 
employees are paid by the House, some by 
the Senate and some— such as those in the 






28370 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



Office of the Architect of the Capitol— by a 
seperate fund. 

The Senate and the House contribute 
equally to the U.S. Capitol Police. Those of- 
ficers who receive House paychecks will be 
covered while those paid by the Senate will 
not be. 

The change in the House rules, which 
does not require Senate action or a presi- 
dential signature, takes effect immediately. 
The resolution will have to be reapproved 
by the 101st Congress when it convenes in 
January. Such ratification is expected to be 
routine. 

Only the Senate remains open to charges 
that it is the "last plantation," where em- 
ployees have none of the rights that Con- 
gress has written into law for the rest of the 
country. But the Senate is expected to face 
pressure to take similar action next year. 
Sen. John S. McCain III (R-Ariz.) said yes- 
terday that he had received a commitment 
from Sen. John Glenn (D-Ohio) that 
Glenn's Governmental Affairs Committee 
will hold hearings on an identical plan next 
year. 

House leadership sources acknowledged 
that the action was spurred by rumors that 
further news accounts were in the works. 
An advertisement in Roll Call, the Capitol 
Hill newspaper, asking disgruntled employ- 
ees to call CBS' "60 Minutes" was the last 
straw, these sources said. 

Rep. Leon E. Panetta (D-Calif.), who led 
the effort to develop an acceptable resolu- 
tion, said the Democratic leadership is com- 
mitted to writing the protections into law 
next summer and extending them to the 
Senate. 

Panetta, Rep. Steve Bartlett (R-Tex.) and 
others at the center of the battle over rights 
of congressional employees, including the 
two most vocal— Reps. Patricia Schroeder 
(D-Colo.) and Lynn M. Martin (R-Ill.)— ac- 
knowledged the action is a first step. Con- 
gress has exempted itself from numerous 
statutes and yesterday's vote does not affect 
exemptions from such laws as the Occupa- 
tional Health and Safety Act and the Fair 
Labor Standards Act, which governs wages 
and overtime. 

Schroeder and Reps. Morris K. Udall CD- 
Ariz.) and Charlie Rose (D/N.C.) had 
formed an ad hoc panel to protect Hill 
workers, but it has no powers other than 
persuasion. A new fair employment office 
and a formal review panel— with extensive 
powers— will replace the ad hoc panel. 

A staff member on the House Administra- 
tion Committee said that researchers could 
find no other formal action to protect Hill 
workers since the First Congress in 1789. 

In an emotional floor speech as the bill 
was first debated Monday, Martin said, "To 
the person who works on the elevator, to 
the person who works downstairs in the 
mail room, to the bright young black man 
who has come to work here on the D.C. 
Committee, to every bright young woman 
who has tried to work here and has some- 
times worked under circumstances that are 
difficult to really appreciate . . . this bill is 
for you. . . ." 

To attract widespread support, the com- 
promise plan kept everything within the 
House of Representatives— setting up an 
Office of Fair Employment Practices whose 
decisions could be appealed to a new review 
panel. The office would be separate from 
the Equal Employment Opportunity Com- 
mission, but would be guided by all laws and 
court decisions affecting the EEOC. 

A number of members opposed placing 
congressional employees under the EEOC 



on the grounds that making Congress sub- 
ject to an executive branch agency would 
violate separation of powers. 

An employee would have 180 days from 
the date of an alleged violation to file a 
complaint. The new fair employment office 
would first attempt to counsel the employee 
and mediate the dispute. If that failed, the 
employee may apply for— and must be 
given— a prompt hearing. Either party may 
appeal to the review panel, which would be 
made up of two Democrats and two Republi- 
cans from the House Administration Com- 
mittee, plus four House officers and employ- 
ees, two appointed by the speaker and two 
by the minority leader. 

The review panel, whose decision is final 
and not subject to court review, could order 
monetary damages, reinstatement or promo- 
tion, plus back pay or attorney fees. 

Mr. McCAIN. Mr. President, I am 
fully aware that there is no chance of 
this legislation being enacted into law 
this year. I do urge my colleagues, 
however, to join me in cosponsoring 
the bill, and in working with me to 
ensure that our employees enjoy the 
same safeguards as the rest of the 
American people. I hope that the Full 
Senate will address this issue at the 
earliest opportunity. I think the legis- 
lation is fair, I think it preserves the 
constitutional separation between the 
branches and, frankly, Mr. President, I 
think it is long, long overdue. 



SENATE RESOLUTION 489— TO 
DIRECT SENATE LEGAL COUN- 
SEL 

Mr. BYRD (for himself and Mr. 
Dole) submitted the following resolu- 
tion; which was considered and agreed 
to: 

S. Res. 489 

Whereas, in 1985 and 1986 the Permanent 
Subcommittee on Investigations of the 
Committee on Government Affairs conduct- 
ed an investigation of the Government's 
handling of a criminal investigation into al- 
legations that a union local had unlawfully 
hired employees who were not expected to 
perform any work; 

Whereas, in the case of United States v. 
Harold Friedman, et al., No. CR 86-114, 
pending in the United States District Court 
for the Northern District of Ohio, one of 
the defendants has obtained a subpoena for 
the production of documents from the in- 
vestigation by Mary Robertson, Chief Clerk 
of the Permanent Subcommittee on Investi- 
gations; 

Whereas, pursuant to section 703(a) and 
704(a)(2) of the Ethics in Government Act 
of 1978, 2 U.S.C. 288b(a) and 288c(a)(2) 
(1982), the Senate may direct its counsel to 
represent employees of the Senate with re- 
spect to subpoenas issued to them in their 
official capacity; 

Whereas, by the privileges of the Senate 
of the United States and Rule XI of the 
standing Rules of the Senate, no evidence 
under the control or in the possession of the 
Senate can, by the judicial process, be taken 
from such control or possession but by per- 
mission of the Senate: Now, therefore, be it 

Resolved, That the Senate Legal Counsel 
is directed to represent Mary Robertson in 
the case of United States v. Harold Fried- 
man, et al. 



Sec. 2. That the Chairman and Ranking 
Minority Member of the Permanent Sub- 
committee on Investigations, acting jointly, 
are authorized to provide records of the 
Subcommittee's investigation, if in their 
judgment circumstances so warrant. 



SENATE RESOLUTION 490— TO 
DIRECT SENATE LEGAL COUN- 
SEL 

Mr. BYRD (for himself and Mr. 
Dole) submitted the following resolu- 
tion; which was considered and agreed 
to: 

S. Res. 490 

Whereas, in the case of Hunter, et al. v. 
Kalamarides, et al, Case No. 88-0500C, 
pending in the United States District Court 
for the Western District of New York, the 
plaintiffs have named Senator Ted Stevens 
as one of the defendants; 

Whereas, pursuant to sections 703(a) and 
704(a)(1) of the Ethics in Government Act 
of 1978, 2 U.S.C. 288b(a) and 288c(a)(l) 
(1982), the Senate may direct its counsel to 
defend the members of the Senate in civil 
actions relating to their official responsibil- 
ties: Now, therefore, be it 

Resolved, That the Senate Legal Counsel 
is directed to represent Senator Stevens in 
the case of Hunter, et al. v. Kalamarides, et 
al. 

AMENDMENTS SUBMITTED 



TECHNICAL CORRECTIONS TO 
TAX REFORM ACT OF 1986 



RUDMAN (AND OTHERS) 
AMENDMENT NO. 3410 

(Ordered to lie on the table.) 
Mr. RUDMAN (for himself, Mr. 
Biden, Mr. D'Amato, and Mr. Chiles) 
submitted an amendment intended to 
be proposed by them to the bill (S. 
2238) to make technical corrections re- 
lating to the Tax Reform Act of 1986, 
and for other purposes; as follows: 

At the appropriate place in the bill, insert 
the following new section: 

SEC. . INCREASE IN TAX ON CIGARETTES AND 
ALCOHOL. 

(a) Cigarettes— 

(1) Rate of Tax.— Subsection (b) of sec- 
tion 5701 of the Internal Revenue Code of 
1986 (relating to rate of tax on cigarettes) is 
amended— 

(A) by striking "$8" in paragraph (1) and 
inserting in lieu thereof "$9"; and 

(B) by striking "$16.80" in paragraph (2) 
and inserting in lieu thereof "$18.90". 

(2) Floor Stocks.— 

(A) Imposition of tax.— On cigarettes 
manufactured in or imported into the 
United States which are removed before 
January 1, 1989, and held on such date for 
sale by any person, there shall be imposed 
the following taxes: 

(i) Small cigarettes.— On cigarettes, 
weighing not more than 3 pounds per thou- 
sand, $1 per thousand; 

(ii) Large cigarettes.— On cigarettes, 
weighing more than 3 pounds per thousand, 
$2.10 per thousand; except that, if more 
than 6 1/2 inches in length, they shall be 
taxable at the rate prescribed for cigarettes 
weighing not more than 3 pounds per thou- 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28371 



sand, counting each 2 3/4 inches, or fraction 
thereof, of the length of each as one ciga- 
rette. 

(B) Liability for tax and method of pay- 
ment.— 

(i) Liability for tax.— A person holding 
cigarettes on January 1, 1989, to which any 
tax imposed by paragraph (1) applies shall 
be liable for such tax. 

(ii) Method of payment.— The tax im- 
posed by paragraph (1) shall be treated as a 
tax imposed under section 5701 of the Inter- 
nal Revenue Code of 1986 and shall be due 
and payable on February 16, 1989, in the 
same manner as the tax imposed under such 
section is payable with respect to cigarettes 
removed on January 1, 1989. 

(C) Cigarette.— For purposes of this sec- 
tion, the term "cigarette" shall have the 
meaning given to such term by subsection 
(b) of section 5702 of the Internal Revenue 
Code of 1986. 

(D) Exception for retail stocks.— The 
taxes imposed by paragraph (1) shall not 
apply to cigarettes in retail stocks held on 
January 1, 1989, at the place where intend- 
ed to be sold at retail. 

(E) Foreign trade zones.— Notwithstand- 
ing the Act of June 18, 1934 (19 U.S.C. 81a 
et seq.) or any other provision of law— 

(i) cigarettes— 

(I) on which taxes imposed by Federal law 
are determined, or customs duties are liqui- 
dated, by a customs officer pursuant to a re- 
quest made under the first proviso of sec- 
tion 3(a) of the Act of June 18, 1934 (19 
U.S.C. 81c(a)) before January 1, 1989, and 

(II) which are entered into the customs 
territory of the United States on or after 
January 1, 1989, from a foreign trade zone, 
and 

(ii) cigarettes which— 

(I) are placed under the supervision of a 
customs officer pursuant to the provisions 
of the second proviso of section 3(a) of the 
Act of June 18, 1934 (19 U.S.C. 81c(a)) 
before January 1, 1989, and 

(II) are entered into the customs territory 
of the United States on or after January 1, 
1989, from a foreign trade zone, 

shall be subject to the tax imposed by para- 
graph (1) and such cigarettes shall, for pur- 
poses of paragraph (1), be treated as being 
held on January 1, 1989, for sale. 

(b) Distilled Spirits.— 

(1) In general.— Paragraphs (1) and (3) of 
section 5001(a) of the Internal Revenue 
Code of 1986 (relating to rate of tax) are 
each amended by striking out "$12.50" and 
inserting in lieu thereof "$14.00". 

(2) Conforming amendment.— Subsection 
(a) of section 5010 of such Code (relating to 
credit for wine content and for flavors con- 
tent) is amended by striking "$12.50" both 
places it appears and inserting in lieu there- 
of "$14.00". 

(c) Wines.— Subsection (b) of section 5041 
of the Internal Revenue Code of 1986 (relat- 
ing to rates of tax) is amended— 

(1) by striking out "17 cents" in paragraph 

(1) and inserting in lieu thereof "42 cents", 

(2) by striking out "67 cents" in paragraph 

(2) and inserting in lieu thereof "92 cents", 

(3) by striking out "$2.25" in paragraph 

(3) and inserting in lieu thereof "$2.50", 

(4) by striking out "$3.40" in paragraph 

(4) and inserting in lieu thereof "$3.65", and 

(5) by striking out "$2.40" in paragraph 

(5) and inserting in lieu thereof "$2.65". 

(d) Beer.— Section 5051(a) of the Internal 
Revenue Code of 1986 is amended— 

(1) by striking out "$9" in paragraph (1) 
and inserting in lieu thereof "$11.80"; and 



(2) by striking out "$7" in the caption and 
text of paragraph (2)(A) and inserting in 
lieu thereof "$9.80". 

(e) Floor Stocks on Distilled Spirits, 
Wine, and Beer.— 

(1) Imposition of tax on distilled spir- 
its.— On articles manufactured in or import- 
ed into the United States which are taxable 
under section 5001(a) of the Internal Reve- 
nue Code of 1986, removed before January 
1, 1989, and held on such date for sale by 
any person there shall be imposed the fol- 
lowing taxes: 

(A) Distilled spirits.— On distilled spir- 
its, $1.50 per proof gallon. 

(B) Imported perfumes.— On imported 
perfumes described in section 5001(a)(3) of 
such Code, $1.50 per wine gallon. 

(2) Imposition of tax on wines.— On 
wines produced in or imported into the 
United States which are taxable under sec- 
tion 5041(a) of such Code, removed before 
January 1, 1989, and held on such date for 
sale by any person there shall be imposed 
the following taxes: 

(A) On still wines containing not more 
than 14 percent of alcohol by volume, 25 
cents per wine gallon; 

(B) On still wines containing more than 14 
percent and not exceeding 21 percent of al- 
cohol by volume, 25 cents per wine gallon; 

(C) On still wines containing more than 21 
percent and not exceeding 24 percent of al- 
cohol by volume, 25 cents per wine gallon; 

(D) On champagne and other sparkling 
wines, 25 cents per wine gallon; and 

(E) On artificially carbonated wines, 25 
cents per wine gallon. 

(3) Imposition of tax on beer.— On beer 
brewed or produced in, or imported into, the 
United States which is taxable under sec- 
tion 5051(a) of such Code, removed before 
January 1, 1989, and held on such date for 
sale by any person there shall be imposed 
the following taxes: 

(A) On beer described in section 5051(a)(1) 
of such Code, $2.80 per barrel. 

(B) On beer described in section 5051(a)(2) 
of such Code, $2.80 per barrel. 

(4) Liability for tax and method of pay- 
ment.— 

(A) Liability for tax.— A person holding 
distilled spirits, an article, wine, or beer on 
January 1, 1989, to which any tax imposed 
by paragraph (1), (2), or (3) applies shall be 
liable for such tax. 

(B) Method of payment.— The taxes im- 
posed by paragraphs (1), (2), and (3) shall be 
treated as taxes imposed under section 
5001(a), 5041(a), and section 5051(a) of such 
Code, respectively, and— 

(i) shall be paid in such manner as the 
Secretary shall by regulations prescribe, and 

(ii) shall be paid as such date (not later 
than 6 months after the date of the enact- 
ment of this Act) as the Secretary shall by 
regulations prescribe. 

(5) Exception for on-premises retail es- 
tablishments.— To the extent provided in 
regulations prescribed by the Secretary, the 
taxes imposed by paragraphs (1), (2), and (3) 
shall not apply to distilled spirits, articles, 
wine, and beer held on January 1, 1989, on 
the premises of a retail establishment where 
alcoholic beverages are sold for consump- 
tion on the premises only. 

(6) Definitions.— For purposes of this sec- 
tion— 

(A) Distilled spirits.— The term "dis- 
tilled spirits" has the meaning given to such 
term by section 5002(a)(8) of the Internal 
Revenue Code of 1986. 

(B) Proof gallon.— The term "proof 
gallon" has the meaning given to such term 
by section 5002(a)(ll) of such Code. 



(C) Article.— The term "article" has the 
meaning given to such term by section 
5002(a)(14) of such Code. 

(D) Wine gallon.— The term "wine 
gallon" has the meaning given to such term 
by section 5041(c) of such Code. 

(E) Beer.— The term "beer" has the mean- 
ing given to such term by section 5052(a) of 
such Code. 

(F) Person.— The term "person" includes 
any State or political subdivision thereof, or 
any agency or instrumentality of a State or 
political subdivision thereof. 

(G) Secretary.— The term "Secretary" 
means the Secretary of the Treasury or his 
delegate. 

(f) Establishment of Drug-Free America 
Trust Fund.— Amounts equal to all addi- 
tional revenues resulting from the provi- 
sions and amendments made by subsections 
(a), (b), (c), (d), and (e) of this section shall 
be deposited by the Secretary of the Treas- 
ury into a special fund of the United States 
Treasury, to be known as the "Drug-Free 
America Trust Fund", and shall remain 
available for making expenditures to carry 
out the purposes of the Omnibus Anti-Sub- 
stance Abuse Act of 1988, as provided by ap- 
propriation Acts. 

(g) Effective Dates.— 

(1) Amendments.— The amendments made 
by subsections (a)(1), (b), (c), and (d) shall 
apply to cigarettes, distilled spirits, wine, 
and beer removed after December 31, 1988, 
and before January 1, 1991, but only if the 
Omnibus Anti-Substance Abuse Act of 1988 
is enacted. 

(2) Other provisions.— Subsections (a)(2), 
(e), and (f) shall take effect on the date of 
the enactment of this Act, but only if the 
Omnibus Anti-Substance Abuse Act of 1988 
is enacted. 



BERNE CONVENTION 
IMPLEMENTATION ACT 



LEAHY (AND OTHERS) 
AMENDMENT NO. 3411 

Mr. LEAHY (for himself, Mr. 
DeConcini and Mr. Hatch) proposed 
an amendment to the bill (3. 1301) to 
amend title 17, United States Code, to 
implement the Berne Convention for 
the Protection of Literary and Artistic 
Works, as revised at Paris on July 24, 
1971, and for other purposes; as fol- 
lows: 

In lieu of the language proposed to be in- 
serted, insert the fallowing: 

SECTION 1. SHORT TITLE AND REFERENCES TO 
TITLE 17, UNITED STATES CODE. 

(a) Short Title.— This Act may be cited 
as the "Berne Convention Implementation 
Act of 1988". 

(b) References to Title 17, United 
States Code.— Whenever in this Act an 
amendment or repeal is expressed in terms 
of an amendment to or a repeal of a section 
or other provision, the reference shall be 
considered to be made to a section or other 
provision of title 17, United States Code. 

SEC. 2. DECLARATIONS. 

The Congress makes the following decla- 
rations: 

(1) The Convention for the Protection of 
Literary and Artistic Works, signed at 
Berne, Switzerland, on September 9, 1886, 
and all acts, protocols, and revisions thereto 
(hereafter in this Act referred to as the 






28372 

"Berne Convention") are not self-executing 
under the Constitution and laws of the 
United States. 

(2) The obligations of the United States 
under the Berne Convention may be per- 
formed only pursuant to appropriate domes- 
tic law. 

(3) The amendments made by this Act, to- 
gether with the law as it exists on the date 
of the enactment of this Act, satisfy the ob- 
ligations of the United States in adhering to 
the Berne Convention and no further rights 
or interests shall be recognized or created 
for that purpose. 

SEC. 3. CONSTRUCTION OF THE BERNE CONVEN- 
TION. 

(a) Relationship With Domestic Law.— 
The provisions of the Berne Convention— 

(1) shall be given effect under title 17, as 
amended by this Act, and any other rele- 
vant provision of Federal or State law, in- 
cluding the common law; and 

(2) shall not be enforceable in any action 
brought pursuant to the provisions of the 
Berne Convention itself. 

(b) Certain Rights Not Affected.— The 
provisions of the Berne Convention, the ad- 
herence of the United States thereto, and 
satisfaction of United States obligations 
thereunder, do not expand or reduce any 
right of an author of a work, whether 
claimed under Federal, State, or the 
common law — 

(1) to claim authorship of the work; or 

(2) to object to any distortion, mutilation, 
or other modification of, or other derogato- 
ry action in relation to, the work, that 
would prejudice the author's honor or repu- 
tation. 

SEC. 4. SUBJECT MATTER AND SCOPE OF COPY- 
RIGHTS. 

(a) Subject and Scope.— Chapter 1 is 
amended— 
(1) in section 101— 

(A) in the definition of "Pictorial, graphic, 
and sculptural works" by striking out in the 
first sentence "technical drawings, dia- 
grams, and models" and inserting in lieu 
thereof "diagrams, models, and technical 
drawings, including architectural plans"; 

(B) by inserting after the definition of 
"Audiovisual works", the following: 

"The 'Berne Convention' is the Conven- 
tion for the Protection of Literary and Ar- 
tistic Works, signed at Berne, Switzerland, 
on September 9, 1886, and all acts, proto- 
cols, and revisions thereto. 

"A work is a 'Berne Convention work' if— 

"(1) in the case of an unpublished work, 
one or more of the authors is a national of a 
nation adhering to the Berne Convention, 
or in the case of a published work, one or 
more of the authors is a national of a nation 
adhering to the Berne Convention on the 
date of first publication; 

"(2) the work was first published in a 
nation adhering to the Berne Convention, 
or was simultaneously first published in a 
nation adhering to the Berne Convention 
and in a foreign nation that does not adhere 
to the Berne Convention; 

"(3) in the case of an audiovisual work— 

"(A) if one or more of the authors is a 
legal entity, that author has its headquar- 
ters in a nation adhering to the Berne Con- 
vention; or 

"(B) if one or more of the authors is an in- 
dividual, that author is domiciled, or has his 
or her habitual residence in, a nation adher- 
ing to the Berne Convention; or 

"(4) in the case of a pictorial, graphic, or 
sculptural work that is incorporated in a 
building or other structure, the building or 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



structure is located in a nation adhering to 
the Berne Convention. 

For purposes of paragraph (1), an author 
who is domiciled in or has his or her habitu- 
al residence in, a nation adhering to the 
Berne Convention is considered to be a na- 
tional of that nation. For purposes of para- 
graph (2), a work is considered to have been 
simultaneously published in two or more na- 
tions if its dates of publication are within 30 
days of one another."; and 

(C) by inserting after the definition of 
"Copyright owner", the following: 

"The 'country of origin' of a Berne Con- 
vention work, for purposes of section 411, is 
the United States if— 

"(1) in the case of a published work, the 
work is first published— 
"(A) in the United States; 
"(B) simultaneously in the United States 
and another nation or nations adhering to 
the Berne Convention, whose law grants a 
term of copyright protection that is the 
same as or longer than the term provided in 
the United States; 

"(C) simultaneously in the United States 
and a foreign nation that does not adhere to 
the Berne Convention; or 

"(D) in a foreign nation that does not 
adhere to the Berne Convention, and all of 
the authors of the work are nationals, domi- 
ciliaries, or habitual residents of, or in the 
case of an audiovisual work legal entities 
with headquarters in, the United States; 

"(2) in the case of an unpublished work, 
all the authors of the work are nationals, 
domiciliaries, or habitual residents of the 
United States, or, in the case of an unpub- 
lished audiovisual work, all the authors are 
legal entities with headquarters in the 
United States; or 

"(3) in the case of a pictorial, graphic, or 
sculptural work incorporated in a building 
or structure, the building or structure is lo- 
cated in the United States. 
For the purposes of section 411, the 'coun- 
try of origin' of any other Berne Convention 
work is not the United States."; 

(2) in section 104(b)— 

(A) by redesignating paragraph (4) as 
paragraph (5); and 

(B) by inserting after paragraph (3) the 
following new paragraph: 

"(4) the work is a Berne Convention work; 
or"; 

(3) in section 104 by adding at the end 
thereof the following: 

"(c) Effect of Berne Convention.— No 
right or interest in a work eligible for pro- 
tection under this title may be claimed by 
virtue of, or in reliance upon, the provisions 
of the Berne Convention, or the adherence 
of the United States thereto. Any rights in a 
work eligible for protection under this title 
that derive from this title, other Federal or 
State statutes, or the common law, shall not 
be expanded or reduced by virtue of, or in 
reliance upon, the provisions of the Berne 
Convention, or the adherence of the United 
States thereto."; and 

(4) by inserting after section 116 the fol- 
lowing new section: 

"§116A. Negotiated licenses for public perform- 
ances by means of coin-operated phonorecord 
players 

"(a) Applicability of Section.— This sec- 
tion applies to any nondramatic musical 
work embodied in a phonorecord. 

"(b) Limitation on Exclusive Right if 
Licenses Not Negotiated.— 

"(1) Applicability.— In the case of a work 
to which this section applies, the exclusive 
right under clause (4) of section 106 to per- 



form the work publicly by means of a coin- 
operated phonorecord player is limited by 
section 116 to the extent provided in this 
section. 

"(2) Determination by copyright royal- 
ty tribunal.— The Copyright Royalty Tri- 
bunal, at the end of the 1-year period begin- 
ning on the effective date of the Berne Con- 
vention Implementation Act of 1988, and pe- 
riodically thereafter to the extent necessary 
to carry out subsection (f), shall determine 
whether or not negotiated licenses author- 
ized by subsection (c) are in effect so as to 
provide permission to use a quantity of mu- 
sical works not substantially smaller than 
the quantity of such works performed on 
coin-operated phonorecord players during 
the 1-year period ending on the effective 
date of that Act. If the Copyright Royalty 
Tribunal determines that such negotiated li- 
censes are not so in effect, the Tribunal 
shall, upon making the determination, pub- 
lish the determination in the Federal Regis- 
ter. Upon such publication, section 116 shall 
apply with respect to musical works that are 
not the subject of such negotiated licenses. 
"(c) Negotiated Licenses.— 
"(1) Authority for negotiations.— Any 
owners of copyright in works to which this 
section applies and any operators of coin-op- 
erated phonorecord players may negotiate 
and agree upon the terms and rates of roy- 
alty payments for the performance of such 
works and the proportionate division of fees 
paid among copyright owners, and may des- 
ignate common agents to negotiate, agree 
to, pay, or receive such royalty payments. 

"(2) Arbitration.— Parties to such a nego- 
tiation, within such time as may be specified 
by the Copyright Royalty Tribunal by regu- 
lation, may determine the result of the ne- 
gotiation by arbitration. Such arbitration 
shall be governed by the provisions of title 
9, to the extent such title is not inconsistent 
with this section. The parties shall give 
notice to the Copyright Royalty Tribunal of 
any determination reached by arbitration 
and any such determination shall, as be- 
tween the parties to the arbitration, be dis- 
positive of the issues to which it relates. 

"(d) License Agreements Superior to 
Copyright Royalty Tribunal Determina- 
tions.— License agreements between one or 
more copyright owners and one or more op- 
erators of coin-operated phonorecord play- 
ers, which are negotiated in accordance with 
subsection (c), shall be given effect in lieu of 
any otherwise applicable determination by 
the Copyright Royalty Tribunal. 

"(e) Negotiation Schedule.— Not later 
than 60 days after the effective date of the 
Berne Convention Implementation Act of 
1988, if the Chairman of the Copyright 
Royalty Tribunal has not received notice, 
from copyright owners and operators of 
coin-operated phonorecord players referred 
to in subsection (c)(1), of the date and loca- 
tion of the first meeting between such copy- 
right owners and such operators to com- 
mence negotiations authorized by subsec- 
tion (c), the Chairman shall announce the 
date and location of such meeting. Such 
meeting may not be held more than 90 days 
after the effective date of such Act. 

"(f) Copyright Royalty Tribunal To 
Suspend Various Activities.— The Copy- 
right Royalty Tribunal shall not conduct 
any ratemaking activity with respect to 
coin-operated phonorecord players unless, 
at any time more than one year after the ef- 
fective date of the Berne Convention Imple- 
mentation Act of 1988, the negotiated li- 
censes adopted by the parties under this sec- 
tion do not provide permission to use a 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28373 



quantity of musical works not substantially 
smaller than the quantity of such works 
performed on coin-operated phonorecord 
players during the one-year period ending 
on the effective date of such Act. 

"(g) Transition Provisions; Retention 
of Copyright Royalty Tribunal Jurisdic- 
tion.— Until such time as licensing provi- 
sions are determined by the parties under 
this section, the terms of the compulsory li- 
cense under section 116, with respect to the 
public performance of nondramatic musical 
works by means of coin-operated phonorec- 
ord players, which is in effect on the day 
before the effective date of the Berne Con- 
vention Implementation Act of 1988, shall 
remain in force. If a negotiated license au- 
thorized by this section comes into force so 
as to supersede previous determinations of 
the Copyright Royalty Tribunal, as provid- 
ed in subsection (d), but thereafter is termi- 
nated or expires and is not replaced by an- 
other licensing agreement, then section 116 
shall be effective with respect to musical 
works that were the subject of such termi- 
nated or expired licenses."; and 

(b) Technical Amendments.— (1) Section 
116 is amended— 

(A) by amending the section heading to 
read as follows: 

"§ 116. Scope of exclusive rights in nondramatic 
musical works: Compulsory licenses for public 
performances by means of coin-operated pho- 
norecord players"; 

(B) in subsection (a) in the matter preced- 
ing paragraph (1), by inserting after "in a 
phonorecord," the following: "the perform- 
ance of which is subject to this section as 
provided in section 116A,"; and 

(C) in subsection (e), by inserting "and 
section 116A" after "As used in this sec- 
tion". 

(2) The table of sections at the beginning 
of chapter 1 is amended by striking out the 
item relating to section 116, and inserting in 
lieu thereof the following: 
"116. Scope of exclusive rights in nondrama- 
tic musical works: Compulsory 
licenses for public perform- 
ances by means of coin-operat- 
ed phonorecord players. 
"116A. Negotiated licenses for public per- 
formances by means of coin-op- 
erated phonorecord players.". 

SEC. 5. RECORDATION. 

Section 205 is amended— 

(1) by striking out subsection (d); and 

(2) by redesignating subsections (e) and (f ) 
as subsections (d) and (e), respectively. 

SEC. 6. PREEMPTION WITH RESPECT TO OTHER 
LAWS NOT AFFECTED. 

Section 301 is amended by adding at the 
end thereof the following: 

"(e) The scope of Federal preemption 
under this section is not affected by the ad- 
herence of the United States to the Berne 
Convention or the satisfaction of obliga- 
tions of the United States thereunder.". 

SEC. 7. NOTICE OF COPYRIGHT. 

(a) Visually Perceptible Copies.— Section 
401 is amended— 

(1) in subsection (a), by amending the sub- 
section heading to read as follows: 

"(a) General Provisions.—"; 

(2) in subsection (a), by striking out "shall 
be placed on all" and inserting in lieu there- 
of "may be placed on"; 

(3) in subsection (b), by striking out "The 
notice appearing on the copies" and insert- 
ing in lieu thereof "If a notice appears on 
the copies, it"; and 

(4) by adding at the end the following: 



"(d) Evidentiary Weight of Notice.— If a 
notice of copyright in the form and position 
specified by this section appears on the pub- 
lished copy or copies to which a defendant 
in a copyright infringement suit had access, 
then no weight shall be given to such a de- 
fendant's interposition of a defense based 
on innocent infringement in mitigation of 
actual or statutory damages, except as pro- 
vided in the last sentence of section 
504(c)(2).". 

(b) Phonorecords of Sound Recordings.— 
Section 402 is amended— 

(1) in subsection (a), by amending the sub- 
section heading to read as follows: 

"(a) General Provisions.—"; 

(2) in subsection (a), by striking out "shall 
be placed on all" and inserting in lieu there- 
of "may be placed on"; 

(3) in subsection (b), by striking out "The 
notice appearing on the phonorecords" and 
inserting in lieu thereof "If a notice appears 
on the phonorecords, it"; and 

(4) by adding at the end thereof the fol- 
lowing new subsection: 

"(d) Evidentiary Weight of Notice.— If a 
notice of copyright in the form and position 
specified by this section appears on the pub- 
lished phonorecord or phonorecords to 
which a defendant in a copyright infringe- 
ment suit had access, then no weight shall 
be given to such a defendant's interposition 
of a defense based on innocent infringement 
in mitigation of actual or statutory dam- 
ages, except as provided in the last sentence 
of section 504(c)(2).". 

(c) Publications Incorporating United 
States Government Works.— Section 403 is 
amended to read as follows: 

"Sections 401(d) and 402(d) shall not 
apply to a work published in copies or phon- 
orecords consisting predominantly of one or 
more works of the United States Govern- 
ment unless the notice of copyright appear- 
ing on the published copies or phonorecords 
to which a defendant in the copyright in- 
fringement suit had access includes a state- 
ment identifying, either affirmatively or 
negatively, those portions of the copies or 
phonorecords embodying any work or works 
protected under this title.". 

(d) Notice of Copyright; Contributions 
to Collective Works.— Section 404 is 
amended— 

(1) in subsection (a), by striking out "to 
satisfy the requirements of sections 401 
through 403", and inserting in lieu thereof 
"to invoke the provisions of section 401(d) 
or 402(d), as applicable"; and 

(2) in subsection (b), by striking out 
"Where" and inserting in lieu thereof "With 
respect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
where". 

(e) Omission of Notice.— Section 405 is 
amended— 

(1) in subsection (a), by striking out "The 
omission of the copyright notice prescribed 
by" and inserting in lieu thereof "With re- 
spect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
the omission of the copyright notice de- 
scribed in"; 

(2) in subsection (b), by striking out 
"omitted," in the first sentence and insert- 
ing in lieu thereof "omitted and which was 
publicly distributed by authority of the 
copyright owner before the effective date of 
the Berne Convention Implementation Act 
of 1988,"; and 



(3) by amending the section heading to 
read as follows: 
"§ 405. Notice of copyright: Omission of notice on 

certain copies and phonorecords" 

(f) Error in Name or Date.— Section 406 
is amended— 

(1) in subsection (a) by striking out 
"Where" and inserting in lieu thereof "With 
respect to copies and phonorecords publicly 
distributed by authority of the copyright 
owner before the effective date of the Berne 
Convention Implementation Act of 1988, 
where"; 

(2) in subsection (b) by inserting "before 
the effective date of the Berne Convention 
Implementation Act of 1988" after "distrib- 
uted"; 

(3) in subsection (c)— 

(A) by inserting "before the effective date 
of the Berne Convention Implementation 
Act of 1988" after "publicly distributed"; 
and 

(B) by inserting after "405" the following: 
"as in effect on the day before the effective 
date of the Berne Convention Implementa- 
tion Act of 1988"; and 

(4) by amending the section heading to 
read as follows: 

"§ 406. Notice of copyright: Error in name or date 
on certain copies and phonorecords". 
(g) Clerical Amendment.— The table of 
sections at the beginning of chapter 4 is 
amended by striking out the items relating 
to sections 405 and 406 and inserting in lieu 
thereof the following: 
"405. Notice of copyright: Omission of 

notice on certain copies and 

phonorecords. 
"406. Notice of copyright: Error in name or 

date on certain copies and 

phonorecords.". 

SEC. 8. DEPOSIT OF COPIES OR PHONORECORDS 
FOR LIBRARY OF CONGRESS. 

Section 407(a) is amended by striking out 
"with notice of copyright". 

SEC. 9. COPYRIGHT REGISTRATION. 

(a) Registration in General.— Section 
408 is amended— 

(1) in subsection (a), by striking out "Sub- 
ject to the provisions of section 405(a), 
such" in the second sentence and inserting 
in lieu thereof "Such"; 

(2) in subsection (c)(2)— 

(A) by striking out "all of the following 
conditions—" and inserting in lieu thereof 
"the following conditions:"; 

(B) by striking out subparagraph (A); and 

(C) by redesignating subparagraphs (B) 
and (C) as subparagraphs (A) and (B), re- 
spectively. 

(b) Infringement Actions.— 

(1) Registration as a prerequisite.— Sec- 
tion 411 is amended— 

(A) by amending the section heading to 
read as follows: 

"§411. Registration and infringement actions"; 

(B) in subsection (a) by striking out "Sub- 
ject" and inserting in lieu thereof "Except 
for actions for infringement of copyright in 
Berne Convention works whose country of 
origin is not the United States, and sub- 
ject"; and 

(C) in subsection (b)(2) by inserting ", if 
required by subsection (a)," after "work". 

(2) Table of sections.— The table of sec- 
tions at the beginning of chapter 4 is 
amended by striking out the item relating to 
section 411 and inserting in lieu thereof the 
following: 

"411. Registration and infringement ac- 
tions.". 



I 






28374 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



SEC. 10. COPYRIGHT INFRINGEMENT AND REME- 
DIES. 

(a) Infringement.— Section 501(b) is 
amended by striking out "sections 205(d) 
and 411," and inserting in lieu thereof "sec- 
tion 411,". 

(b) Damages and Profits.— Section 504(c) 
is amended— 

(1) in paragraph (1)— 

(A) by striking out "$250", and inserting 
in lieu thereof "$500"; and 

(B) by striking out "$10,000", and insert- 
ing in lieu thereof "$20,000"; and 

(2) in paragraph (2)— 

(A) by striking out "$50,000.", and insert- 
ing in lieu thereof "$100,000."; and 

(B) by striking out "$100.", and inserting 
in lieu thereof "$200.". 

SEC. 11. COPYRIGHT ROYALTY TRIBUNAL. 

Chapter 8 is amended— 

(1) in section 801, by adding at the end of 
subsection (b) the following: "In determin- 
ing whether a return to a copyright owner 
under section 116 is fair, appropriate weight 
shall be given to— 

"(i) the rates previously determined by 
the Tribunal to provide a fair return to the 
copyright owner, and 

"(ii) the rates contained in any license ne- 
gotiated pursuant to section 116A of this 
title."; and 

(2) by amending section 804(a)(2)(C) to 
read as follows: 

"(CXi) In proceedings under section 
801(b)(1) concerning the adjustment of roy- 
alty rates as provided in section 115, such 
petition may be filed in 1990 and in each 
subsequent tenth calendar year, and at any 
time within 1 year after negotiated licenses 
authorized by section 116A are terminated 
or expire and are not replaced by subse- 
quent agreements. 

"(ii) If negotiated licenses authorized by 
section 116A come into force so as to super- 
sede previous determinations of the Tribu- 
nal, as provided in section 116A(d), but 
thereafter are terminated or expire and are 
not replaced by subsequent agreements, the 
Tribunal shall, upon petition of any party 
to such terminated or expired negotiated li- 
cense agreement, promptly establish an in- 
terim royalty rate or rates for the public 
performance by means of a coin-operated 
phonorecord player of nondramatic musical 
works embodied in phonorecords which had 
been subject to the terminated or expired 
negotiated license agreement. Such interim 
royalty rate or rates shall be the same as 
the last such rate or rates and shall remain 
in force until the conclusion of proceedings 
to adjust the royalty rates applicable to 
such works, or until superseded by a new ne- 
gotiated license agreement, as provided in 
section 116A(d).". 

SEC. 12. WORKS IN THE PUBLIC DOMAIN. 

Title 17, United States Code, as amended 
by this Act, does not provide copyright pro- 
tection for any work that is in the public 
domain in the United States. 

SEC. 13. EFFECTIVE DATE; EFFECT ON PENDING 
CASES. 

(a) Effective Date.— This Act and the 
amendments made by this Act take effect 
on the date on which the Berne Convention 
(as defined in section 101 of title 17, United 
States Code) enters into force with respect 
to the United States. 

(b) Effect on Pending Cases.— Any cause 
of action arising under title 17, United 
States Code, before the effective date of 
this Act shall be governed by the provisions 
of such title as in effect when the cause of 
action arose. 



OMNIBUS ANTI-SUBSTANCE 
ABUSE ACT 



THURMOND (AND OTHERS) 
AMENDMENT NO. 3412 

(Ordered to lie on the table.) 
Mr. THURMOND (for himself, Mr. 
Ford, Mr. Hatch, Mr. Evans, Mr. Hol- 
lings, Mr. Simon, Mr. Gore, Mr. 
Chiles, and Mr. Matsunaga) submit- 
ted an amendment intended to be pro- 
posed to the bill (S. 2238) to provide 
for an omnibus Federal, State, and 
local effort against substance abuse, to 
provide for a Cabinet-level position to 
centralize and streamline Federal ac- 
tivities with respect to both drug 
supply (interdiction and law enforce- 
ment) and drug demand (prevention, 
education, and treatment), to expand 
Federal support to ensure a long-term 
commitment of resources and person- 
nel for a substance abuse education, 
treatment, and rehabilitation efforts, 
to strengthen and improve the en- 
forcement of Federal drug law and en- 
hance the interdiction of illicit drug 
shipments, and for other purposes; as 
follows: 
At the end of the bill, add the following: 
Sec (a) The Federal Alcohol Ad- 
ministration Act (27 U.S.C. 201 et seq.) is 
amended— 

(1) by inserting immediately after the en- 
acting clause the following centered head- 
ing: 

"TITLE I— FEDERAL ALCOHOL 
ADMINISTRATION"; 

(2) by redesignating the first section and 
section 2 through 17 as sections 101 through 
117, respectively; and 

(3) by adding at the end the following new 
title: 

"TITLE II— ALCOHOLIC BEVERAGE 
LABELING 

"SHORT TITLE 

"Sec. 201. This title may be cited as the 
"Alcoholic Beverage Labeling Act of 1988". 

"DECLARATION OF POLICY AND PURPOSE 

"Sec 202. The Congress finds that the 
American public should be informed about 
the health hazards that may result from 
the consumption or abuse of alcoholic bev- 
erages, and has determined that it would be 
beneficial to provide a clear, nonconfusing 
reminder of such hazards, and that there is 
a need for national uniformity in such re- 
minders in order to avoid the promulgation 
of incorrect or misleading information and 
to minimize burdens on interstate com- 
merce. The Congress finds that requiring 
such reminders on all containers of alcohol- 
ic beverages is appropriate and necessary in 
view of the substantial role of the Federal 
Government in promoting the health and 
safety of the Nation's population. It is 
therefore the policy of the Congress, and 
the purpose of this title, to exercise the full 
reach of the Federal Government's constitu- 
tional powers in order to establish a compre- 
hensive Federal program, in connection 
with the manufacture and sale of alcoholic 
beverages in or affecting interstate com- 
merce, to deal with the provision of warning 
or other information with respect to any re- 
lationship between the consumption or 
abuse of alcoholic beverages and health, so 
that- 



'll) the public may be adequately remind- 
ed about any health hazards that may be as- 
sociated with the consumption or abuse of 
alcoholic beverages through a nationally 
uniform, nonconfusing warning notice on 
each container of such beverages; and 

"(2) commerce and the national economy 
may be— 

"(A) protected to the maximum extent 
consistent with this declared policy, 

"(B) not impeded by diverse, nonuniform, 
and confusing requirements for warnings or 
other information on alcoholic beverage 
containers with respect to any relationship 
between the consumption or abuse of alco- 
holic beverages and health, and 

"(C) protected from the adverse effects 
that would result from a noncomprehensive 
program covering alcoholic beverage con- 
tainers sold in interstate commerce, but not 
alcoholic beverage containers manufactured 
and sold within a single State. 

"DEFINITIONS 

"Sec 203. As used in this title— 

"(1) The term 'alcoholic beverage' in- 
cludes any beverage in liquid form which 
contains not less than one-half of one per- 
cent of alcohol by volume and is intended 
for human consumption. 

"(2) The term 'bottle' means to fill a con- 
tainer with an alcoholic beverage and to seal 
such container. 

"(3) The term 'bottler' means a person 
who bottles an alcoholic beverage. 

"(4) The term 'commerce' means— 

"(A) commerce between any State, the 
District of Columbia, the Commonwealth of 
Puerto Rico, the Commonwealth of the 
Northern Mariana Islands, Guam, the 
Virgin Islands, American Samoa, Wake 
Island, the Midway Islands, Kingman Reef, 
or Johnston Island and any place outside 
thereof; 

"(B) commerce between points in any 
State, the District of Columbia, the Com- 
monwealth of Puerto Rico, the Common- 
wealth of the Northern Mariana Islands, 
Guam, the Virgin Islands, American Samoa, 
Wake Island, the Midway Islands, Kingman 
Reef, or Johnston Island, but through any 
place outside thereof; or 

"(C) commerce wholly within the District 
of Columbia, the Commonwealth of Puerto 
Rico, the Commonwealth of the Northern 
Mariana Islands, Guam, the Virgin Islands, 
American Samoa, Wake Island, the Midway 
Islands, Kingman Reef, or Johnston Island. 

"(5) The term 'container' means the inner- 
most sealed container irrespective of the 
material from which made, in which an al- 
coholic beverage is place by the bottler and 
in which such beverage is offered for sale to 
members of the general public. 

"(6) The term 'health' includes, but is not 
limited to, the prevention of accidents. 

"(7) The term 'person' means an individ- 
ual, partnership, joint stock company, busi- 
ness trust, association, corporation, or any 
other business or legal entity, including a 
receiver, trustee, or liquidating agent, and 
also includes any State, any State agency, or 
any officer or employee thereof. 

"(8) The term 'sale' and 'distribution' in- 
clude sampling or any other distribution not 
for sale. 

"(9) The term 'Secretary' means the Sec- 
retary of the Treasury. 

"(10) The term 'State' includes any politi- 
cal subdivision of any State, the District of 
Columbia, the Commonwealth of Puerto 
Rico, the Commonwealth of the Northern 
Mariana Islands, Guam, the Virgin Islands, 






October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28375 



American Samoa, Wake Island, the Midway 
Islands, Kingman Reef, or Johnston Island. 

"(11) The term 'State law' includes State 
statutes, regulations, and principles and 
rules having the force of law. 

"(12) The term 'United States', when used 
in geographical sense, includes the several 
States, the District of Columbia, the Com- 
monwealth of Puerto Rico, the Common- 
wealth of the Northern Mariana Islands, 
Guam, the Virgin Islands, American Samoa, 
Wake Island, the Midway Islands, Kingman 
Reef, and Johnston Island. 

"LABELING REQUIREMENT; CONSPICUOUS 
STATEMENT 

"Sec 204. (a) On and after the expiration 
of the 12-month period following the date of 
enactment of this title, it shall be unlawful 
for any person to manufacture, import, or 
bottle for sale or distribution in the United 
States any alcoholic beverage unless the 
container of such beverage bears the follow- 
ing statement: 

GOVERNMENT WARNING: (1) According to 
the Surgeon General, women should not 
drink alcoholic beverages during pregnancy 
because of the risk of birth defects. (2) Con- 
sumption of alcoholic beverages impairs 
your ability to drive a car or operate ma- 
chinery, and may cause health problems.*. 

"(b) The statement required by subsection 
(a) of this section shall be located in a con- 
spicuous and prominent place on the con- 
tainer of such beverage, as determined by 
the Secretary, shall be in type of a size de- 
termined by the Secretary, and shall appear 
on a contrasting background. The Secretary 
shall make such determinations within 90 
days after the date of enactment of this 
title. 

"(c) Subsection (a) of this section shall 
not apply with respect to alcoholic bever- 
ages that are manufactured, imported, bot- 
tled, or labeled for export from the United 
States, or for delivery to a vessel or aircraft, 
as supplies, for consumption beyond the ju- 
risdiction of the internal revenue laws of 
the United States: Provided, That this ex- 
emption shall not apply with respect to al- 
coholic beverages that are manufactured, 
imported, bottled, or labeled for sale, distri- 
bution, or shipment to members or units of 
the Armed Forces of the United States, in- 
cluding those located outside the United 
States. 

"(d) The Secretary shall— 

"(1) have the power to— 

"(A) ensure the enforcement of the provi- 
sions of this title, and 

"(B) issue regulations to carry out this 
title, and 

"(2) consult and coordinate the health 
awareness efforts of the labeling require- 
ments of this title with the Surgeon Gener- 
al of the United States. 

"PREEMPTION 

"Sec. 205. No statement relating to alco- 
holic beverages and health, other than the 
statement required by section 204 of this 
title, shall be required under State law to be 
placed on any container of an alcoholic bev- 
erage, or on any box, carton, or other pack- 
age, irrespective of the material from which 
made, that contains such a container. 

"REPORT TO CONGRESS 

"Sec 206. If, after appropriate investiga- 
tion and consultation with the Surgeon 
General carried out after the expiration of 
the 24-month period following the date of 
enactment of this title, the Secretary finds 
that available scientific information would 
justify a change in, addition to, or deletion 
of the statement, or any part thereof, set 



forth in section 204(a) of this title, the Sec- 
retary shall promptly report such informa- 
tion to the Congress together with specific 
recommendations for such amendments to 
this title as the Secretary determines to be 
appropriate and in the public interest. 
"civil penalties 
"Sec 207. Any person who violates the 
provisions of this title shall be subject to a 
civil penalty of not more than $10,000, and 
each day shall constitute a separate offense. 

"injunction proceedings; compromise of 
liability 

"Sec 208. (a) The several district courts of 
the United States are vested with jurisdic- 
tion, for cause shown, to prevent and re- 
strain violations of this title upon the appli- 
cation of the Attorney General of the 
United States acting through the several 
United States attorneys in their several dis- 
tricts. 

"(b) The Secretary is authorized, with re- 
spect to any violation of this title, to com- 
promise the liability arising with respect to 
such violation upon payment of a sum for 
each offense, to be collected by the Secre- 
tary and to be paid into the Treasury as 
miscellaneous receipts. 

"SEVERABILITY 

"Sec 209. If any provision of this title or 
the application thereof to any person or cir- 
cumstance is held invalid, the validity of the 
remainder of this title and this Act and of 
the application of such provision to other 
persons and circumstances shall not be af- 
fected thereby. 

"EFFECTIVE DATE 

"Sec 210. Except as provided in section 
204(a), this title shall take effect on the 
date of its enactment into law.". 

(b) The Federal Alcohol Administration 
Act, as amended by this Act, is further 
amended— 

(1) by amending section 101, as redesignat- 
ed under subsection (a)(2) of this Act, to 
read as follows: 

"SHORT TITLE 

"Sec 101. This title may be cited as the 
'Federal Alcohol Administration Act'."; 

(2) in sections 103, 104, 105, 107, 108, and 
117, as so redesignated, by striking "this 
Act" each place it appears and inserting in 
lieu thereof "this title"; 

(3) in section 104(d), as so redesignated, by 
striking "section 5" and inserting in lieu 
thereof "section 105" and by striking "sec- 
tion 6" and inserting in lieu thereof "section 
106"; and 

(4) in section 107, as so redesignated, by 
striking "section 3 or 5" and inserting in lieu 
thereof "section 103 or 105". 



SEC. 



EXEMPTION OF CERTAIN RELIGIOUS 
SCHOOLS FROM FEDERAL UNEM- 
PLOYMENT TAX. 

(a) In General.— Section 3309(b)(1) of the 
1986 Code (relating to exemption from un- 
employment tax) is amended by inserting 
before the semicolon at the end thereof the 
following: ", or (C) an elementary or second- 
ary school which is operated primarily for 
religious purposes, which is described in sec- 
tion 501(c)(3), and which is exempt from tax 
under section 501(a)". 

(b) Effective Date.— The amendment 
made by subsection (a) shall apply to serv- 
ices performed after December 31, 1988. 



TECHNICAL CORRECTIONS TO 
TAX REFORM ACT OF 1986 



THURMOND (AND OTHERS) 
AMENDMENT NO. 3413 

(Ordered to lie on the table.) 
Mr. THURMOND (for himself, Mr. 
Grassley, and Mr. Heflin) submitted 
an amendment intended to be pro- 
posed by them to the bill S. 2238, 
supra; as follows: 

At the appropriate place, insert the fol- 
lowing new section: 



RETAIL COMPETITION 



KASSEBAUM (AND OTHERS) 
AMENDMENT NO. 3414 

Mrs. KASSEBAUM (for herself, Mr. 
Durenberger, and Mr. Dole) proposed 
an amendment to amendment No. 
3037 proposed by Mr. Wallop to the 
bill (S. 430) to amend the Sherman 
Act regarding retail competition; as 
follows: 

At the end of Amendment No. 3037, add 
the following new section, and renumber ac- 
cordingly: 

That this Act may be cited as the "Gener- 
al Aviation Accident Liability Standards Act 
of 1987." 

FINDINGS AND PURPOSE 

Sec 2. (a) The Congress finds that— 

(1) transportation by air of passengers 
continues to comprise an increasingly im- 
portant component of the nation's overall 
transportation system; 

(2) although the incidence of injuries to 
passengers in general aviation accidents has 
decreased, the number of general aviation 
accident liability claims againt general avia- 
tion aircraft manufacturers and the amount 
of damages sought in such claims is increas- 
ing at disproportionate rates, beyond any re- 
lationship to the quality of the aircraft 
manufactured and in use; 

(3) the current system for determining li- 
ability and damages for compensating indi- 
viduals injured in general aviation accidents 
is inadequate; 

(4) competent general aviation manufac- 
turers and component part manufacturers 
are ceasing or limiting production of general 
aviation aircraft or some models of such air- 
craft because of the incresing costs and un- 
availability of product liability insurance; 

(5) the increase in the number of liability 
claims and the size of awards and settle- 
ments, and the excessive time and expense 
devoted to the resolution of such claims, 
impose a substantial economic burden on 
general aviation manufacturers and their 
dealers; 

(6) the Federal Government has an inter- 
est in the general aviation accident liability 
system because the Federal Government 
has established a comprehensive system for 
regulating general aviation, including— 

(A) establishing standards for design, con- 
struction, and certification of general avia- 
tion aircraft, 

(B) establishing standards for mainte- 
nance of aicraft, licensing of repair facili- 
ties, and licensing of persons who may per- 
form or approve maintenance, repairs, and 
inspections, 

(C) establishing standards for training and 
licensing of pilots, 






'■ 



28376 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



(D) establishing a comprehensive air con- 
trol system, 

(E) conducting investigations to determine 
the probable cause of aviation accidents and 
prevent future accidents, and 

(F) conducting other activities necessary 
to assure a safe air transportation system; 
and this Federal system is the exclusive 
legal authority for regulating aviation oper- 
ations and safety; 

(7) it is in the national interest to reduce 
unnecesary expenditures related to general 
aviation accident liability claims while pro- 
viding more rapid and more efficient com- 
pensation for individuals harmed in general 
aviation accidents; and 

(8) Federal action to reform the general 
aviation accident liability system will result 
in- 

(A) the maintenance of airworthy general 
aviation aircraft; and 

(B) a more rational general aviation acci- 
dent liability system. 

(b) It is the purpose of this Act to estab- 
lish standards for determining liability for 
harm arising out of general aviation acci- 
dents. 

DEFINITIONS 

Sec 3. As used in this Act, the term— 

(1) "Administrator" means the Adminis- 
trator of the Federal Aviation Administra- 
tion; 

(2) "claimant" means any person who 
brings a general aviation accident liability 
action subject to this Act, and any person 
on whose behalf such an action is brought, 
including— 

(A) the claimant's decedent; and 

(B) the claimant's parent or guardian, if 
the action is brought through or on behalf 
of a minor or incompetent; 

(3) "general aviation accident" means any 
accident which arises out of the operation 
of any general aviation aircraft and which 
results in harm; 

(4) "general aviation aircraft" means any 
aircraft for which a type certificate or an 
airworthiness certificate has been issued by 
the Administrator under the Federal Avia- 
tion Act of 1958 (49 App. U.S.C. 1301 et seq.) 
which, at the time such certificate was origi- 
nally issued, had a maximum seating capac- 
ity of fewer than twenty passengers, and 
which is not, at the time of the accident, en- 
gaged in scheduled passenger carrying oper- 
ations as defined in regulations issued under 
the Federal Aviation Act of 1958 (49 App. 
U.S.C. 1301 et seq.); 

(5) "general aviation manufacturer" 
means— 

(A) the builder or manufacturer of the air- 
frame of a general aviation aircraft; 

(B) the manufacturer of the engine of a 
general aviation aircraft; and 

(C) the manufacturer of any system, com- 
ponent, subassembly, or other part of a gen- 
eral aviation aircraft; 

(6) "harm" means— 

(A) property damage or bodily injury sus- 
tained by a person; 

(B) death resulting from such bodily 
injury; 

(C) pain and suffering which is caused by 
such bodily injury; and 

(D) emotional harm (including bereave- 
ment and loss of affection, care, or society) 
which is caused by such bodily injury; 

(7) "product" means a general aviation 
aircraft and any system, component, subas- 
sembly, or other part of a general aviation 
aircraft; and 

(8) "property damage" means physical 
injury to tangible property, including loss of 
use of tangible property. 



preemption: applicability 
Sec. 4. (a) This Act supersedes any State 
law regarding recovery, under any legal 
theory, for harm arising out of a general 
aviation accident, to the extent that this 
Act establishes a rule of law or procedure 
applicable to the claim. 

(b) Nothing in this Act shall be construed 
to supersede or to waive or affect any de- 
fense of sovereign immunity asserted by the 
United States or any State. 

(c) Nothing in this Act shall be construed 
to affect the liability of a manufacturer, 
owner, or operator of any aircraft that is 
not a general aviation aircraft, or a person 
who repairs, maintains, or provides any 
other support for any aircraft that is not a 
general aviation aircraft, for damages for 
harm arising out of the operation of an air- 
craft that is not a general aviation aircraft. 

(d) No right of action for harm exists 
under this Act if that right would be incon- 
sistent with the provisions of any applicable 
workers' compensation law. 

(e) The provisions of this Act shall apply 
only to— 

(1) any manufacturer, owner, or operator 
of any general aviation aircraft, and any 
person who repairs, maintains, or provides 
any other support for such an aircraft; 

(2) any occupant of a general aviation air- 
craft at the time of a general aviation acci- 
dent, and any person who brings an action 
for harm caused by such accident on behalf 
of such occupant; and 

(3) any nonoccupant of a general aviation 
aircraft at the time of a general aviation ac- 
cident, only if such nonoccupant is bringing 
an action for harm caused by such accident 
which arises out of the harm to an occupant 
of such aircraft at the time of such accident. 

UNIFORM STANDARDS OF LIABILITY FOR 
GENERAL AVIATION ACCIDENTS 

Sec 5. (a) Any person claiming damages 
for harm arising out of a general aviation 
accident may bring an action against a party 
and may recover damages from such party, 
if such party was negligent and such negli- 
gence is a proximate cause of the claimant's 
harm. 

(b)(1) Any person claiming damages for 
harm arising out of a general aviation acci- 
dent may bring an action against a general 
aviation manufacturer of a product and may 
recover damages from such general aviation 
manufacturer if— 

(A) the product, when it left the control 
of the manufacturer, was in a defective con- 
dition unreasonably dangerous for its in- 
tended purpose, according to engineering 
and manufacturing practices which were 
reasonably feasible; 

(B) the defective condition is a proximate 
cause of the claimant's harm; and 

(C) the general aviation aircraft was being 
used at the time of the accident for a pur- 
pose and in a manner for which it was de- 
signed and manufactured. 

(2) Any person claiming damages for harm 
arising out of a general aviation accident 
may bring an action against a general avia- 
tion manufacturer of a product and may re- 
cover damages from such general aviation 
manufacturer if— 

(A) at the time the product left the con- 
trol of the manufacturer, the manufactur- 
er— 

(i) knew, or in the exercise of reasonable 
care should have known, about a danger 
connected with the product that caused the 
claimant's harm; and 

(ii) failed to provide the warnings or in- 
structions that a person exercising reasona- 
ble care would have provided with respect to 



the danger which caused the harm alleged 
by the claimant, unless such warnings or in- 
structions, if provided, would not have ma- 
terially affected the conduct of the user of 
the product; or 

(B) after the product left the control of 
the general aviation manufacturer, the 
manufacturer— 

(i) knew, or in the exercise of reasonable 
care should have known, about the danger 
which caused the claimant's harm; and 

(ii) failed to take reasonable steps to pro- 
vide warnings or instructions, after the 
manufacturer of the product, which would 
have been provided by a person exercising 
reasonable care, unless such warnings or in- 
structions, if provided, would not have ma- 
terially affected the conduct of the product 
user; 

and the failure to provide warnings or in- 
structions described in subparagraph (A) or 
(B) of this paragraph is a proximate cause 
of the claimant's harm. 

(3) Any person claiming damages for harm 
arising out of a general aviation accident 
may bring an action against a general avia- 
tion manufacturer of a product and may re- 
cover damages from such general aviation 
manufacturer if— 

(A) the manufacturer made an express 
warranty with respect to the product; 

(B) such warranty relates to that aspect of 
the product which caused the harm; 

(C) the product failed to conform to such 
warranty; and 

(D) the failure of the product to conform 
to such warranty is a proximate cause of the 
claimant's harm. 

(c)(1) In an action governed by subsection 
(b) of this section, a general aviation manu- 
facturer shall not be liable if such manufac- 
turer proves, by a preponderance of the evi- 
dence, that— 

(A) the defective condition could have 
been corrected by compliance with action 
described in an airworthiness directive 
issued by the Administrator or a service bul- 
letin issued by the manufacturer of the 
product; and 

(B) such directive or service bulletin was 
issued at a reasonable time before the date 
of the accident and after the product left 
the control of the general aviation manufac- 
turer. 

(2) In any action governed by subsection 
(b) of this section, evidence of compliance 
with standards, conditions or specifications 
established, adopted or approved by the 
Federal Aviation Administration shall be ad- 
missible with regard to whether the product 
was defective and unreasonably dangerous 
for its intended purpose. 

COMPARATIVE RESPONSIBILITY 

Sec 6. (a) All actions for harm arising out 
of a general aviation accident shall be gov- 
erned by the principles of comparative re- 
sponsibility. Comparative responsibility at- 
tributed to the claimant's conduct shall not 
bar recovery in an action under this Act, but 
shall reduce any damages awarded to the 
claimant in an amount proportionate to the 
responsibility of the cliamant. the trier of 
fact shall determine comparative responsi- 
bility by making findings indicating the per- 
centage of total responsibility for the claim- 
ant's harm attributable to the claimant, 
each defendant, each third-party defendant, 
and any other person not a party to the 
action. 

(b) Except as provided in subsection (c) of 
this section, a defendant is severally but not 
jointly liable in any action for harm arising 
out of a general aviation accident, and the 






October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28377 



liability of any defendant in any such action 
shall be determined on this basis of such de- 
fendant's proportionate share of responsi- 
bility for the claimant's harm. 

(c) In any action for harm arising out of a 
general aviation accident— 

(Da general aviation manufacturer who is 
the builder or manufacturer of the airframe 
of the general aviation aircraft involved is 
jointly and severally liable for harm caused 
by a defective system, component, subas- 
sembly, or other part of such aircraft that 
the manufacturer installed or certified as 
part of the original type design for such air- 
craft; and 

(2) a general aviation manufacturer who is 
the manufacturer of a system or component 
of the general aviation aircraft involved is 
jointly and severally liable for damages 
caused by a defective subassembly or other 
part of such system or component. 

(d) A general aviation manufacturer and 
any other person jointly liable under sub- 
section (c) of this section shall have the 
right to bring an action for indemnity or 
contribution against any person with whom 
they are jointly liable under subsection (c) 
of this section. 

TIME LIMITATION ON LIABILITY 

Sec. 7. (a) Except as provided in subsec- 
tion (b) of this section, no civil action for 
harm arising out of a general aviation acci- 
dent which is brought against a general 
aviation manufacturer may be brought for 
harm which is alleged to have been caused 
by an aircraft or a system, component, sub- 
assembly, or other part of an aircraft and 
which occurs more than— 

(1) twenty years from— 

(A) the date of delivery of the aircraft to 
its first purchaser or lessee, if delivered di- 
rectly from the manufacturer; or 

(B) the date of first delivery of the air- 
craft to a person engaged in the business of 
selling or leasing such an aircraft; or 

(2) with respect to any system, compo- 
nent, subassembly, or other part whcih re- 
placed another product in, or which was 
added to, the aircraft, and which is alleged 
to have caused the claimant's harm, twenty 
years from the date of the replacement or 
addition. 

(b) Subsection (a) of this section does not 
apply in the case of harm to a claimant 
which occurs after the period set forth in 
subsection (a) of this section if the general 
aviation manufacturer or the seller of the 
product that caused the claimant's harm 
gave an express warranty that the product 
would be suitable, for the purpose for which 
it was intended, for a longer period of time. 

(c) Nothing in this section shall be con- 
strued to affect a person's duty to provide, 
after the sale or lease of an aircraft, to air- 
craft owners, and to repair facilities to 
which a license or certificate to perform re- 
pairs has been issued by the Administrator, 
additional or modified warning or instruc- 
tions regarding the use or maintenance of 
such aircraft or any system, component, or 
other part of such aircraft. 

SUBSEQUENT REMEDIAL MEASURES 

Sec. 8. In any general aviation accident li- 
ability action governed by this Act, evidence 
of any measure taken after an event which, 
if taken previously, would have made the 
event less likely to occur is not admissible to 
provide liability. Such evidence is admissible 
to the extent permitted under rule 407 of 
the Federal Rules of Evidence. 

ADMISSIBILITY OF CERTAIN EVIDENCE 

Sec 9. In an action governed by this Act, 
evidence of Federal, State, or local income 



tax liability or any Social Security or other 
payroll tax liability attributable to past or 
future earnings, support, or profits and the 
present value of future earnings, support, or 
profits alleged to have been lost or dimin- 
ished because of harm arising out of a gen- 
eral aviation accident is admissible regard- 
ing proof of the claimant's harm. 

PUNITIVE DAMAGES 

Sec 10. (a) Punitive damages may be 
awarded in an action under this Act for 
harm arising out of a general aviation acci- 
dent only if the claimant establishes by 
clear and convincing evidence that the harm 
suffered was the direct result of conduct 
manifesting a conscious, flagrant indiffer- 
ence to the safety of the those persons who 
might be harmed by use of the general avia- 
tion aircraft involved. 

(b) Evidence regarding the financial worth 
of a defendant or the defendant's profits or 
any other evidence relating solely to a claim 
for punitive damages under this Act is not 
admissible unless the claimant establishes, 
before any such evidence is offered, that the 
claimant can present evidence that will es- 
tablish prima facie proof of conduct mani- 
festing a conscious, flagrant indifference to 
the safety of those persons who might be 
harmed by use of the general aviation air- 
craft involved. 

(c) In any civil action in which the alleged 
harm to the claimant is death and the appli- 
cable State law provides, or has been con- 
strued to provide, for damages only punitive 
in nature, a defendant may be liable for any 
such damages pursuant to the provisions of 
this Act regardless of whether a claim is as- 
serted under this section. The recovery of 
any such damages shall not bar a claim 
under this section. 

TIME LIMITATION ON BRINGING ACTIONS 

Sec 11. (a) Any action for harm arising 
out of a general aviation accident shall be 
barred, notwithstanding any State law, 
unless— 

(1) the complaint is filed within two years 
after the date on which the accident oc- 
curred which caused the claimant's harm; 
and 

(2) the summons and complaint are prop- 
erly served upon the defendant within one 
hundred and twenty days after the filing of 
such complaint, unless the party on whose 
behalf such service is required can show 
good cause why such service was not made 
within such one-hundred-and-twenty-day 
period. 

Paragraph (2) of this subsection shall not 
apply to service of process in a foreign coun- 
try pursuant to rule 4(i) of the Federal 
Rules of Civil Procedure or any similar 
State law. 

SANCTIONS 

Sec 12. It is the intent of Congress that, 
with respect to any action governed by this 
Act, the sanctions for violation of rule 11 of 
the Federal Rules of Civil Procedure, in- 
cluding orders to pay to the other party or 
parties the amount of their reasonable ex- 
penses, including a reasonable attorney's 
fee, be strictly enforced. 

JURISDICTION 

Sec 23. (a) The district courts of the 
United States, concurrently with the State 
courts, shall have original jurisdiction, with- 
out regard to the amount in controversy, in 
all civil actions for harm arising out of a 
general aviation accident and in all actions 
for indemnity or contribution described in 
section 6(d) of this Act. 



(b) A civil action which is brought in a 
State court may be removed to the district 
court of the United States for the district 
embracing the place where the action is 
pending, without the consent of any other 
party and without regard to the amount in 
controversy, by any defendant against 
whom a claim in such action is asserted for 
harm arising out of a general aviation acci- 
dent. 

(c) In any case commenced in or removed 
to a district court of the United States 
under subsection (a) or (b) of this section, 
the court shall have jurisdiction to deter- 
mine all claims under State law that rise out 
of the same general aviation accident, if a 
substantial question of fact is common to 
the claims under State law and to the Fed- 
eral claim, defense, or counterclaim. 

(d)(1) A civil action in which the district 
courts of the United States have jurisdiction 
under subsection (a) of this section may be 
brought only in a district in which— 

(A) the accident giving rise to the claim 
occurred; or 

(B) any plaintiff or defendant resides. 

(2) In an action pending in a district court 
of the United States under paragraph (1) of 
this subsection, a district court may, on 
motion of any party or its own motion, 
transfer the action to any other district for 
the convenience of parties and witnesses in 
the interest of justice. 



OMNIBUS ANTI-SUBSTANCE 
ABUSE ACT 



WALLOP AMENDMENT NO. 3415 

(Ordered to lie on the table.) 

Mr. WALLOP submitted an amend- 
ment intended to be proposed by him 
to the bill, S. 2852, supra; as follows: 

At the appropriate place, add the follow- 
ing: 

A new section 402(f) of the Social Security 
Act as follows, 

Sec 402(f)(1) each individual applying for 
assistance under this Section shall be re- 
quired to be tested for abuse of controlled 
substances, in accordance with regulations 
promulgated by the Secretary; 

(2) it is a condition of receipt of any such 
assistance that any individual receiving as- 
sistance under this Section shall submit to 
tests for the abuse of controlled substances 
at any time, in accordance with regulations 
promulgated by the Secretary; 

(3) it is a requirement that any individual 
found to be an abuser of controlled sub- 
stances shall, whether or not such individ- 
ual is prosecuted pursuant to the Controlled 
Substances Act, be required to register for 
participation in a "qualified drug treatment 
program" as defined by regulations promul- 
gated by the Secretary, which requires con- 
tinued testing of such individual as a condi- 
tion of continued participation in such pro- 
gram. If the individual refuses to register 
for participation in a "qualified drug treat- 
ment program", such individual's needs 
shall not be taken into account in making 
the determination of eligibility for any aid 
under this Section. 












28378 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



ANTI-APARTHEID ACT 
AMENDMENTS 



"necklacing" and state terrorism, against 
South African blacks.". 



PRESSLER AMENDMENTS NOS. 
3416 THROUGH 3418 

(Ordered to lie on the table.) 
Mr. PRESSLER submitted three 
amendments intended to be proposed 
by him to the bill (S. 2756) entitled 
the "Anti-Apartheid Act Amendments 
of 1988;" as follows: 

Amendment No. 3416 
At the end, add the following: 

"SEC. . PROHIBITION ON ASSISTANCE TO THE AF- 
RICAN NATIONAL CONGRESS. 

None of the funds authorized to be appro- 
priated by this or any other Act may be 
used, directly or indirectly, to fund activities 
of the African National Congress until the 
President certifies to the Congress that (1) 
the National Executive Committee of the 
African National Congress has taken a 
stand publicly and officially opposing the 
practice of "necklacing", the practice of exe- 
cution by fire, used against South African 
blacks; (2) the membership of the National 
Executive Committee of the African Nation- 
al Congress is no longer dominated by com- 
munists; and (3) the African National Con- 
gress no longer receives its primary finan- 
cial, military, and training support from the 
Soviet Union or other communist countries 
listed in section 620(f) of the Foreign Assist- 
ance Act of 1961.". 

Amendment No. 3417 

At the end, add the following: 

"SEC. . UNITED NATIONS PROJECTS WHOSE PRI- 
MARY PURPOSE IS TO BENEFIT THE 
AFRICAN NATIONAL CONGRESS. 

Section 114 of the Department of State 
Authorization, Fiscal Years 1984 and 1985, 
is amended— 

(1) in subsection (a)(4)— 

(A) by striking out "it or" and inserting in 
lieu thereof "it,", and 

(B) by inserting before the semicolon", or 
to the African National Congress"; and (2) 
in subsection (b)— 

(A) by striking out "it or" and inserting in 
lieu thereof "it,", and 

(B) by inserting before the period at the 
end thereof ", or to the African National 
Congress". 

Amendment No. 3418 
At the end, add the following: 

"SEC. . PROHIBITION ON U.S. ASSISTANCE TO 
COUNTRIES SUPPORTING "NECKLAC- 
ING". 

Notwithstanding any other provision of 
law or this Act, no funds may be made avail- 
able to any country for which the President 
proposes to disburse funds within the 
Southern Africa Development Coordination 
Conference until the President certifies that 
such country (1) has renounced the form of 
terrorism, commonly known as "necklacing" 
used against South African blacks; (2) has 
provided assurances that the government of 
that country opposes and is making a con- 
certed effort to prevent the operation in its 
territory of any organization that supports, 
encourages, or will not renounce the prac- 
tice of terrorism, including "necklacing" and 
state terrorism, against South African 
blacks; and (3) is, according to the best in- 
formation available to the United States, 
making a concerted effort to prevent the op- 
eration in its territory of any organization 
that supports, encourages or will not re- 
nounce the practice of terrorism, including 



EXTENSION OF EXISTING SUS- 
PENSION OP DUTY ON CER- 
TAIN YTTRIUM ORES, MATERI- 
ALS, AND COMPOUNDS 



LEAHY AMENDMENT NO. 3419 
Mr. BYRD (for Mr. Leahy) proposed 
an amendment to the bill (S. 2399) to 
extend until December 31, 1993, the 
existing suspension of duty on certain 
yttrium ores, materials, and com- 
pounds; as follows: 

Strike all after the enacting clause and 
insert in lieu thereof the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the "Forest Eco- 
systems and Atmospheric Pollution Re- 
search Act of 1988". 

SEC. 2. FINDINGS. 

Congress finds that— 

(1) the health and productivity of forests 
in certain regions of the United States are 
declining; 

(2) there is a special concern about the de- 
cline of certain hardwood species, particu- 
larly sugar maples and oaks, in the eastern 
United States and the effects of atmospher- 
ic pollutants on the health and productivity 
of these forests; 

(3) declines in the productivity of certain 
commercially important southern pine spe- 
cies have been measured; 

(4) existing research indicates that atmos- 
pheric pollution, including ozone, acidic dep- 
osition, and heavy metals, may contribute to 
this decline; 

(5) there is an urgent need to expand and 
better coordinate existing Federal, State, 
and private research, including research by 
private industry, to determine the cause of 
changes in the health and productivity of 
domestic forest ecosystems and to monitor 
and evaluate the effects of atmospheric pol- 
lutants on such ecosystems; and 

(6) such research and monitoring should 
not impede efforts to control atmospheric 
pollutants. 

SEC. 3. ESTABLISHMENT OF RESEARCH PROGRAM. 

Section 3 of the Forest and Rangeland Re- 
newable Resources Research Act of 1978 (16 
U.S.C. 1642) is amended by adding at the 
end the following: 

"(c)(1) The Secretary, acting through the 
United States Forest Service, shall establish 
not later than 180 days after the date of the 
enactment of this subsection a 10-year pro- 
gram (hereinafter in this subsection re- 
ferred to as the 'Program') to— 

"(A) increase the frequency of forest in- 
ventories in matters that relate to atmos- 
pheric pollution and conduct such surveys 
as are necessary to monitor long-term 
trends in the health and productivity of do- 
mestic forest ecosystems; 

"(B) determine the scope of the decline in 
the health and productivity of domestic 
forest ecosystems; 

"(C) accelerate and expand existing re- 
search efforts (including basic forest ecosys- 
tem research) to evaluate the effects of at- 
mospheric pollutants on forest ecosystems 
and their role in the decline in domestic 
forest health and productivity; 

"(D) study the relationship between at- 
mospheric pollution and other climatologi- 
cal, chemical, physical, and biological fac- 



tors that may affect the health and produc- 
tivity of domestic forest ecosystems; 

"(E) develop recommendations for solving 
or mitigating problems related to the effects 
of atmospheric pollution on the health and 
productivity of domestic forest ecosystems; 

"(F) foster cooperation among Federal, 
State, and private researchers and encour- 
age the exchange of scientific information 
on the effects of atmospheric pollutants on 
forest ecosystems among the United States, 
Canada, European nations, and other na- 
tions; 

"(G) support the long-term funding of re- 
search programs and related efforts to de- 
termine the causes of declines in the health 
and productivity of domestic forest ecosys- 
tems and the effects of atmospheric pollut- 
ants on the health and productivity of do- 
mestic forest ecosystems; and 

"(H) enlarge the Eastern Hardwood Coop- 
erative by devoting additional resources to 
field analysis of the response of hardwood 
species to atmospheric pollution, and other 
factors that may affect the health and pro- 
ductivity of these ecosystems. 

"(2) The Secretary shall establish a com- 
mittee to advise the Secretary in developing 
and carrying out the Program, which shall 
be composed of scientists with training and 
experience in various disciplines, including 
atmospheric, ecological, and biological sci- 
ences. Such scientists shall be selected from 
among individuals who are actively perform- 
ing research for Federal or State agencies or 
for private industries, institutions, or orga- 
nizations. 

"(3) The Secretary shall coordinate the 
Program with existing research efforts of 
Federal and State agencies and private in- 
dustries, institutions, or organizations. 

"(4) The Secretary shall submit to the 
President and to Congress the following re- 
ports: 

"(A) Not less than 30 days before estab- 
lishing the Program, the Secretary shall 
submit an initial program report— 

"(i) discussing existing information about 
declining health and productivity of forest 
ecosystems on public and private lands in 
North America and Europe; 

"(ii) outlining the findings and status of 
all current research and monitoring efforts 
in North America and Europe on the causes 
and effects of atmospheric pollution on the 
health and productivity of forest ecosys- 
tems; 
"(hi) describing the Program; and 
"(iv) estimating the cost of implementing 
the Program for each fiscal year of its dura- 
tion. 

"(B) Not later than January 15, 1990, and 
January 15 of each year thereafter, during 
which the Program is in operation following 
the year in which the initial program report 
is submitted, the Secretary shall submit an 
annual report— 

"(i) updating information about declining 
health and productivity of forest ecosystems 
on public and private lands in North Amer- 
ica and Europe; 

"(ii) updating the findings and status of 
all current research and monitoring efforts 
in North America and Europe on the causes 
and effects of atmospheric pollution on the 
health and productivity of forest ecosys- 
tems, including efforts conducted under the 
Program; 

"(iii) recommending additional research 
and monitoring efforts to be undertaken 
under the Program to determine the effects 
of atmospheric pollution on the health and 
productivity of domestic forest ecosystems; 
and 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28379 



"(iv) recommending methods for solving 
or mitigating problems stemming from the 
effects of atmospheric pollution on the 
health and productivity of domestic forest 
ecosystems. 

"(C) Not later than 10 years after the date 
on which the initial program report is sub- 
mitted, the Secretary shall submit a final 
report— 

"(i) reviewing existing information about 
declining health and productivity of forest 
ecosystems on public and private lands in 
North America and Europe; 

"(ii) reviewing the nature and findings of 
all research and monitoring efforts conduct- 
ed under the Program and any other rele- 
vant research and monitoring efforts relat- 
ed to the effects of atmospheric pollution 
on forest ecosystems; and 

"(Hi) making final recommendations for 
solving mitigating problems stemming from 
the effects of atmospheric pollution on the 
health and productivity of domestic forest 
ecosystems.". 



SIPSEY RIVER AS A COMPONENT 
OF THE NATIONAL WILD AND 
SCENIC RIVERS SYSTEM LEG- 
ISLATION 



HEFLIN AMENDMENT NO. 3420 
Mr. BYRD (for Mr. Heflin) pro- 
posed an amendment to the bill (S. 
2838) to designate the Sipsey River as 
a component of the National Wild and 
Scenic Rivers System, to designate cer- 
tain areas as additions to the Sipsey 
Wilderness, to designate certain areas 
as additions to the Cheaha Wilderness, 
and to preserve over 30,000 acres of 
pristine natural treasures in the Bank- 
head National Forest for the esthetic 
and recreational benefit of future gen- 
erations of Alabamians, and for other 
purposes; as follows: 

Strike out everything after the enacting 
clause and insert in lieu thereof the follow- 
ing: 

That this Act may be cited as the "Sipsey 
Wild and Scenic River and Alabama Wilder- 
ness Addition Act of 1988". 

TITLE I— WILD AND SCENIC RIVER 

DESIGNATION 
Sec. 101. Section 3(a) of the Wild and 
Scenic River Act (82 Stat. 906, as amended; 
16 U.S.C. 1274(a)) is amended by adding the 
following new paragraph: 

"( )(A) Sipsey fork of the west fork, 
Alabama.— Segments of the Sipsey Fork and 
several tributaries, to be administered by 
the Secretary of Agriculture in the classifi- 
cations indicated, as follows: 

"(1) Sipsey Fork from the confluence of 
Sandy Creek upstream to Forest Highway 
26, as a scenic river. 

"(2) Sipsey Fork from Forest Highway 26 
upstream to its origin at the confluence of 
Thompson Creek and Hubbard Creek, as a 
wild river. 

"(3) Hubbard Creek from its confluence 
with Thompson Creek, upstream to Forest 
Road 210, as a wild river. 

"(4) Thompson Creek from its confluence 
with Hubbard Creek upstream to its origin 
in section 4, township 8 south, range 9 west, 
as a wild river. 

"(5) Tedford Creek from its confluence 
with Thompson Creek upstream to section 



17, township 8 south, range 9 west, as a wild 
river. 

"(6) Mattox Creek from its confluence 
with Thompson Creek upstream to section 
36, township 7 south, range 9 west, as a wild 
river. 

"(7) Borden Creek from its confluence 
with Sipsey Fork upstream to Forest Road 
208, as a wild river. 

"(8) Borden Creek from Forest Road 208 
upstream to its confluence with Montgom- 
ery Creek, as a scenic river. 

"(9) Montgomery Creek from its conflu- 
ence with Borden Creek upstream to the 
southwest quarter of the southwest quarter 
of section 36, township 7 south, range 8 
west, as a scenic river. 

"(10) Flannigan Creek from its confluence 
with Borden Creek upstream to Forest Road 
208, as a wild river. 

"(11) Flannigan Creek from Forest Road 
208 upstream to section 4, township 8 south, 
range 8 west, as a scenic river. 

"(12) Braziel Creek from its confluence 
with Borden Creek upstream to section 12, 
township 8 south, range 9 west, as a wild 
river. 

"(13) Hogood Creek from its confluence 
with Braziel Creek upstream to the conflu- 
ence with an unnamed tributary in section 
7, township 8 south, range 8 west, as a wild 
river. 

"(B) A map entitled 'Sipsey Fork of the 
West Fork Wild and Scenic River*, generally 
depicting the Sipsey Fork and the tributar- 
ies, is on file and available for public inspec- 
tion in the office of the Chief, Forest Serv- 
ice, Department of Agriculture.". 

Sec. 102. The Secretary of Agriculture 
shall conduct a study to determine the feasi- 
bility of constructing a dam to establish a 
substantial lake, suitable for all types of rec- 
reational uses, to be located in the north- 
east portion of the Bankhead National 
Forest. 

Sec. 103. The Secretary is authorized and 
directed to monitor the waters flowing to- 
wards and into Lewis Smith Lake and to 
take actions, including preventative mainte- 
nance, necessary to prevent any national 
forest management activities from causing 
injurious water quality. 
TITLE II-WILDERNESS DESIGNATION 

Sec. 201. (a) In furtherance of the pur- 
poses of the Wilderness Act of 1964 (78 Stat. 
890), the following National Forest System 
lands in the State of Alabama, comprising 
approximately thirteen thousand nine hun- 
dred and seventy acres, as generally depict- 
ed on maps appropriately referenced and on 
file in the Office of the Chief of the Forest 
Service, Department of Agriculture, are 
hereby designated as wilderness, and there- 
fore, as components of the National Wilder- 
ness Preservation System: 

(1) Certain lands in the William B. Bank- 
head National Forest which comprise ap- 
proximately thirteen thousand two hundred 
and sixty acres as generally depicted on a 
map entitled "Sipsey Wilderness Additions- 
Proposed," dated September 1988, and 
which are hereby incorporated in and shall 
be deemed to be part of the Sipsey Wilder- 
ness. 

(2) Certain lands in the Talladega Nation- 
al Forest which compromise approximately 
seven hundred and ten acres as generally 
depicted on a map entitled "Cheaha Wilder- 
ness Additions-Proposed," dated June 1988, 
and which are hereby incorporated in and 
shall be deemed to be a part of the Cheaha 
Wilderness. 

(b) Subject to valid existing rights, wilder- 
ness designated by this Act shall be adminis- 



tered by the Secretary of Agriculture in ac- 
cordance with the provisions of the Wilder- 
ness Act of 1964 (78 Stat. 890); Provided, 
That any reference in such provisions to the 
effective date of the Wilderness Act shall be 
deemed to be a reference to the effective 
date of this Act. 

(c) Consistent with section 4(d)(1) of the 
Wilderness Act of 1964, (78 Stat. 890), and 
the United States Forest Service policy, the 
Secretary of Agriculture may take such 
measures as may be necessary in the control 
of fire, insects, including the southern pine 
beetle, and diseases within the Sipsey Wil- 
derness, and Sipsey Wilderness additions, in- 
cluding any areas within the designated 
boundaries of the Wild and Scenic Rivers, 
subject to conditions as the Secretary deems 
desirable: Provided, That such measures in 
the Secretary's judgment are deemed neces- 
sary to protect threatened resources on Fed- 
eral, State, or private adjacent lands. 
Within five years from the date of enact- 
ment of this Act or sooner for good cause in 
the judgment of the Secretary, the Secre- 
tary shall evaluate the dangers and poten- 
tial dangers created by the southern pine 
beetle and other insects in the Bankhead 
National Forest and adjacent State and pri- 
vate lands. If his evaluation of such dangers 
and potential dangers justify a review of 
present United States Forest Service policy 
about such insects, he shall review such 
policy for the Sipsey Wilderness additions, 
including any areas within designated 
boundaries of Wild and Scenic Rivers and 
adjacent Federal lands, relative to the con- 
trol of such insects. Thereafter, he shall 
monitor the dangers and potential dangers 
of such insects and such policy, closely. 

(d) The Secretary of Agriculture, at his 
discretion, shall convert existing roads 
within the Sipsey Wilderness Addition into 
suitable hiking or horse trails. 
Sec 202. (a) The Congress finds that— 

(1) the Department of Agriculture has 
completed the second roadless area review 
and evaluation program (RARE II); and 

(2) the Congress has made its own review 
and examination of National Forest System 
roadless areas in Alabama and of the envi- 
ronmental impacts associated with alterna- 
tive allocations of such areas. 

(b) On the basis of such review, the Con- 
gress hereby determines and directs that— 

(1) without passing on the question of the 
legal and factual sufficiency of the RARE II 
final environmental statement (dated Janu- 
ary 1979) with respect to National Forest 
System lands in States other than Alabama, 
such statement shall not be subject to judi- 
cial review with respect to National Forest 
System lands in the State of Alabama. 

(2) with respect to the National Forest 
System lands in the State of Alabama which 
were reviewed by the Department of Agri- 
culture in the second roadless area review 
and evaluation (RARE II), and those lands 
referred to in subsection (d), that review 
and evaluation or reference shall be 
deemed, for the purposes of the initial land 
management plans required for such lands 
by the Forest and Rangeland Renewable 
Resources Planning Act of 1974, as amended 
by the National Forest Management Act of 
1976, to be adequate consideration of the 
suitability of such lands for inclusion in the 
National Wilderness Preservation System 
and the Department of Agriculture shall 
not be required to review the wilderness 
option prior to the revisions of the plan, but 
shall review the wilderness option when the 
plans are revised, which revision will ordi- 
narily occur on a ten-year cycle, or at least 












19-059 0-89-4 (Pt. 20) 



28380 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



every fifteen years, unless, prior to such 
time the Secretary finds that conditions in a 
unit have significantly changed; 

(3) areas in the State of Alabama reviewed 
in such final environmental statement, or 
referenced in subsection (d), and not desig- 
nated wilderness upon enactment of this 
Act shall be managed for multiple use in ac- 
cordance with land management plans pur- 
suant to section 6 of the Forest and Range- 
land Renewable Planning Act of 1974, as 
amended by the National Forest Manage- 
ment Act of 1976: Provided, That such areas 
need not be managed for the purpose of pro- 
tecting their suitability for wilderness desig- 
nation prior to or during revision of the ini- 
tial land management plans; 

(4) in the event that revised land manage- 
ment plans in the State of Alabama are im- 
plemented pursuant to section 6 of the 
Forest and Rangeland Renewable Resources 
Act of 1974, as amended by the National 
Forest Management Act of 1976, and other 
applicable law, areas not recommended for 
wilderness designation need not be managed 
for the purpose of protecting their suitabil- 
ity for wilderness designation prior to or 
during revision of such plans and areas rec- 
ommended for wilderness designation shall 
be managed for the purpose of protecting 
their suitability for wilderness designation 
as may be required by the Forest and 
Rangeland Renewable Resources Planning 
Act of 1974, as amended by the National 
Forest Management Act of 1976, and other 
applicable laws; and 

(5) unless expressly authorized by Con- 
gress, the Department of Agriculture shall 
not conduct any further statewide roadless 
area review and evaluation of National 
Forest System lands in the State of Ala- 
bama for the purpose of determining their 
suitability for inclusion in the National Wil- 
derness Preservation System. 

(c) As used in this section, and as provided 
in section 6 of the Forest and Rangeland 
Renewable Resources Planning Act of 1974, 
as amended by the National Forest Manage- 
ment Act of 1976, the term "revision" shall 
not include an "amendment" to a plan. 

(d) The provision of this section shall also 
apply to National Forest System roadless 
lands in the State of Alabama which are less 
than five thousand acres in size. 

Sec. 203. (a) As soon as practicable after 
enactment of this Act, the map and legal de- 
scription of the Sipsey Wilderness Addition 
and the Cheaha Wilderness, as modified by 
section 201(a), shall be filed with the Com- 
mittees on Agriculture and Interior and In- 
sular Affairs of the House of Representa- 
tives and the Committees on Energy and 
Natural Resources and Agriculture, Nutri- 
tion, and Forestry of the Senate, and such 
map and legal description shall have the 
same force and effect as if included in this 
Act: Provided, however, That corrections of 
clerical and typographical errors in such 
legal description and map may be found. 



FEDERAL EMPLOYEES' LEAVE- 
TRANSFER ACT 



PRYOR AMENDMENT NO. 3421 
Mr. BYRD (for Mr. Pryor) proposed 
an amendment to the bill (H.R. 3757) 
to amend title 5, United States Code, 
to permit voluntary transfers of leave 
by Federal employees where needed 
because of medical or other emergency 
situation; as follows: 



Strike out all after the enacting clause 
and insert in lieu thereof the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the "Federal Em- 
ployees Leave Act of 1988". 

SEC. 2. VOLUNTARY TRANSFERS OF LEAVE. 

(a) In General.— Chapter 63 of title 5, 
United States Code, is amended by adding 
at the end thereof the following new sub- 
chapters: 

"SUBCHAPTER III— VOLUNTARY 
TRANSFERS OF LEAVE 

"§ 6331. Definitions 

"For the purpose of this subchapter— 

"(1) the term 'employee' means an em- 
ployee as defined by section 6301(2), exclud- 
ing an individual employed by the govern- 
ment of the District of Columbia; 

"(2) the term 'leave recipient' means an 
employee whose application to receive dona- 
tions of leave under this subchapter is ap- 
proved; 

"(3) the term 'leave donor' means an em- 
ployee whose application to make 1 or more 
donations of leave under this subchapter is 
approved; and 

"(4) 'medical emergency' means a medical 
condition of an employee or a family 
member of such employee that is likely to 
require the prolonged absence of such em- 
ployee from duty and to result in a substan- 
tial loss of income to such employee because 
of the unavailability of paid leave. 

"§ 6332. General authority 

"Notwithstanding any provision of sub- 
chapter I, and subject to the provisions of 
this subchapter, the Office of Personnel 
Management shall establish a program 
under which annual leave accrued or accu- 
mulated by an employee may be transferred 
to the annual leave account of any other 
employee if such other employee requires 
additional leave because of a medical emer- 
gency. 
"§ 6333. Receipt and use of transferred leave 

"(a)(1) An application to receive donations 

of leave under this subchapter, whether 

submitted by or on behalf of an employee— 

"(A) shall be submitted to the employing 

agency of the proposed leave recipient; and 

"(B) shall include— 

"(i) the name, position, title, and grade or 
pay level of the proposed leave recipient; 

"(ii) the reasons why transferred leave is 
needed, including a brief description of the 
nature, severity, anticipated duration, and, 
if it is a recurring one, the approximate fre- 
quency of the medical emergency involved; 

"(iii) if the employing agency so requires, 
certification from 1 or more physicians, or 
other appropriate experts, with respect to 
any matter under clause (ii); and 

"(iv) any other information which the em- 
ploying agency may reasonably require. 

"(2) If an agency requires that an employ- 
ee obtain certification under paragraph 
(lXBXiii) from 2 or more sources, the 
agency shall ensure, either by direct pay- 
ment to the expert involved or by reim- 
bursement, that the employee is not re- 
quired to pay for the expenses associated 
with obtaining certification from more than 
1 of such sources. 

"(3) An employing agency shall approve or 
disapprove an application of a proposed 
leave recipient for leave under this subchap- 
ter, and, to the extent practicable, shall 
notify the proposed leave recipient (or other 
person acting on behalf of the proposed re- 
cipient, if appropriate) of the decision of the 
agency, in writing, within 10 days (excluding 



Saturdays, Sundays, and legal public holi- 
days) after receiving such application. 

"(b) A leave recipient may use annual 
leave received under this subchapter in the 
same manner and for the same purposes as 
if such leave recipient had accrued that 
leave under section 6303, except that any 
annual leave, and any sick leave, accrued or 
accumulated by the leave recipient and 
available for the purpose involved must be 
exhausted before any transferred annual 
leave may be used. 
"(c) Transferred annual leave— 
"(1) may accumulate without regard to 
any limitation under section 6304; and 

"(2) may be substituted retroactively for 
any period of leave without pay, or used to 
liquidate an indebtedness for any period of 
advanced leave, which began on or after a 
date fixed by the employing agency of the 
employee as the beginning of the medical 
emergency involved. 
"S 6334. Donations of leave 

"(a) An employee may, by written applica- 
tion to the employing agency of such em- 
ployee, request that a specified number of 
hours be transferred from the annual leave 
account of such employee to the annual 
leave account of a leave recipient in accord- 
ance with section 6332. 

"(b)(1) In any one leave year, a leave 
donor may donate no more than a total of 
one-half of the amount of annual leave such 
donor would be entitled to accrue during 
the leave year in which the donation is 
made. 

"(2) A leave donor who is projected to 
have annual leave that otherwise would be 
subject to forfeiture at the end of the leave 
year under section 6304(a) may donate no 
more than the number of hours remaining 
in the leave year (as of the date of the 
transfer) for which the leave donor is sched- 
uled to work and receive pay. 

"(3) The employing agency of a leave 
donor may waive the limitation under para- 
graphs (1) and (2). Any such waiver shall be 
made in writing. 

"(c) The Office of Personnel Management 
shall prescribe regulations to include proce- 
dures to carry out this subchapter when the 
leave donor and the leave recipient are em- 
ployed by different agencies. 
"§ 6335. Termination of medical emergency 

"(a) The medical emergency affecting a 
leave recipient shall, for purposes of this 
subchapter, be considered to have terminat- 
ed on the date as of which— 

"(1) the leave recipient notifies the em- 
ploying agency of such leave recipient, in 
writing, that the medical emergency no 
longer exists; 

"(2) the employing agency of such leave 
recipient determines, after written notice 
and opportunity for the leave recipient (or, 
if appropriate, another person acting on 
behalf of the leave recipient) to answer 
orally or in writing, that the medical emer- 
gency no longer exists; or 

"(3) the leave recipient is separated from 
service. 

"(b)(1) The employing agency of a leave 
recipient shall, consistent with guidelines 
prescribed by the Office of Personnel Man- 
agement, establish procedures to ensure 
that a leave recipient is not permitted to use 
or receive any transferred leave under this 
subchapter after the medical emergency ter- 
minates. 

"(2) Nothing in section 5551, 5552, or 6306 
shall apply with respect to any annual leave 
transferred to a leave recipient under this 
subchapter. 






October 5, 1988 

"§ 6336. Restoration of transferred leave 

"(a)(1) The Office of Personnel Manage- 
ment shall establish procedures under 
which, except as provided in paragraph (2), 
any transferred leave remaining to the 
credit of a leave recipient when the medical 
emergency affecting the leave recipient ter- 
minates shall be restored on a prorated 
basis by transfer to the appropriate ac- 
counts of the respective leave donors. 

"(2) Nothing in paragraph (1) shall re- 
quire the restoration of leave to a leave 
donor— 

"(A) if the amount of leave which would 
be restored to such donor would be less than 
1 hour or any other shorter period of time 
which the Office may by regulation pre- 
scribe; 

"(B) if such donor retires, dies, or is other- 
wise separated from service, before the date 
on which such restoration would otherwise 
be made; or 

"(C) if such restoration is not administra- 
tively feasible, as determined under regula- 
tions prescribed by the Office. 

"(b) At the election of the leave donor, 
transferred annual leave restored to such 
leave donor under subsection (a) may be re- 
stored by— 

"(1) crediting such leave to the leave 
donor's annual leave account in the then 
current leave year; 

"(2) crediting such leave to the leave 
donor's annual leave account, effective as of 
the first day of the first leave year begin- 
ning after the date of the election; or 

"(3) donating such leave in whole or part 
to another leave recipient; if a leave donor 
elects to donate only part of restored leave 
to another recipient, the donor may elect to 
have the remaining leave credited to the 
donor's annual leave account in accordance 
with paragraph (1) or (2). 

"(c) The Office shall prescribe regulations 
under which this section shall be applied in 
the case of an employee who is paid other 
than on the basis of biweekly pay periods. 

"(d) Restorations of leave under this sec- 
tion shall be carried out in a manner con- 
sistent with regulations prescribed to carry 
out section 6334(c), if applicable. 

"§ 6337. Accrual of leave 
"(a) For the purpose of this section— 
"(1) the term 'paid leave status under sub- 
chapter I', as used with respect to an em- 
ployee, means the administrative status of 
such employee while such employee is using 
sick leave, or annual leave, accrued or accu- 
mulated under subchapter I; and 

"(2) the term 'transferred leave status', as 
used with respect to an employee, means 
the administrative status of such employee 
while such employee is using transferred 
leave under this subchapter. 

"(b)(1) Except as otherwise provided in 
this section, while an employee is in a trans- 
ferred leave status, annual leave and sick 
leave shall accrue to the credit of such em- 
ployee at the same rate as if such employee 
were then in a paid leave status under sub- 
chapter I, except that — 

"(A) the maximum amount of annual 
leave which may be accrued by an employee 
while in transferred leave status in connec- 
tion with any particular medical emergency 
may not exceed 5 days; and 

"(B) the maximum amount of sick leave 
which may be accrued by an employee while 
in transferred leave status in connection 
with any particular medical emergency may 
not exceed 5 days. 

"(2) Any annual or sick leave accrued by 
an employee under this section— 



CONGRESSIONAL RECORD— SENATE 



28381 



"(A) shall be credited to an annual leave 
or sick leave account, as appropriate, sepa- 
rate from any leave account of such employ- 
ee under subchapter I; and 

"(B) shall not become available for use by 
such employee, and may not otherwise be 
taken into account under subchapter I, 
until, in accordance with subsection (c), it is 
transferred to the appropriate leave account 
of such employee under subchapter I. 

"(c)(1) Any annual or sick leave accrued 
by an employee under this section shall be 
transferred to the appropriate leave account 
of such employee under subchapter I, effec- 
tive as of the beginning of the first applica- 
ble pay period beginning after the date on 
which the employee's medical emergency 
terminates as described in paragraph (1) or 
(2) of section 6335(a). 

"(2) If the employee's medical emergency 
terminates as described in section 
6335(a)(3), no leave shall be credited to such 
employee under this section. 
"§ 6338. Prohibition of coercion 

"(a) An employee may not directly or indi- 
rectly intimidate, threaten, or coerce, or at- 
tempt to intimidate, threaten, or coerce, any 
other employee for the purpose of interfer- 
ing with any right which such employee 
may have with respect to contributing, re- 
ceiving, or using annual leave under this 
subchapter. 

"(b) For the purpose of subsection (a), the 
term 'intimidate, threaten, or coerce' in- 
cludes promising to confer or conferring any 
benefit (such as an appointment, promotion, 
or compensation), or effecting or threaten- 
ing to effect any reprisal (such as depriva- 
tion of appointment, promotion, or compen- 
sation). 

"§ 6339. Additional leave transfer programs 
"(a) For the purpose of this section— 
"(1) the term 'excepted agency' means— 
"(A) the Central Intelligence Agency; 
"(B) the Defense Intelligence Agency; 
"(C) the National Security Agency; 
"(D) the Federal Bureau of Investigation; 
and 

"(E) as determined by the President, any 
Executive agency or unit thereof, the princi- 
pal function of which is the conduct of for- 
eign intelligence or counterintelligence ac- 
tivities; and 

"(2) the term 'head of an excepted agency' 
means— 

"(A) with respect to the Central Intelli- 
gence Agency, the Director of Central Intel- 
ligence; 

"(B) with respect to the Defense Intelli- 
gence Agency, the Director of the Defense 
Intelligence Agency; 

"(C) with respect to the National Security 
Agency, the Director of the National Securi- 
ty Agency; 

"(D) with respect to the Federal Bureau 
of Investigation, the Director of the Federal 
Bureau of Investigation; and 

"(E) with respect to an Executive agency 
designated under paragraph (IKE), the 
head of such Executive agency, and with re- 
spect to a unit of an Executive agency desig- 
nated under paragraph (1)(E), such individ- 
ual as the President may determine. 

"(b) Notwithstanding any other provision 
of this subchapter, neither an excepted 
agency nor any individual employed in or 
under an excepted agency may be included 
in a leave transfer program established 
under any of the preceding provisions of 
this subchapter. 

"(c)(1) The head of an excepted agency 
shall, by regulation, establish a program 
under which annual leave accrued or accu- 



mulated by an employee of such agency 
may be transferred to the annual leave ac- 
count of any other employee of such agency 
if such other employee requires additional 
leave because of a medical emergency. 

"(2) To the extent practicable, and con- 
sistent with the protection of intelligence 
sources and methods (if applicable), each 
program under this section shall be estab- 
lished— 

"(A) in a manner consistent with the pro- 
visions of this subchapter applicable to the 
program; and 

"(B) without regard to any provisions re- 
lating to transfers or restorations of leave 
between employees in different agencies. 

"(d) The Office of Personnel Management 
shall provide the head of an excepted 
agency with such advice and assistance as 
the head of such agency may request in 
order to carry out the purposes of this sec- 
tion. 
"§ 6340. Inapplicability of certain provisions 

"Except to the extent that the Office of 
Personnel Management may prescribe regu- 
lations, nothing in section 7351 shall apply 
with respect to a solicitation, donation, or 
acceptance of leave under this subchapter. 

"SUBCHAPTER IV— VOLUNTARY LEAVE 
BANK PROGRAM 



"§ 6361. Definitions 

"For the purpose of this subchapter the 
term— 

"(1) 'employee' means an employee as de- 
fined by section 6301(2), but shall exclude 
any individual employed by the government 
of the District of Columbia; 

"(2) 'executive agency' means any execu- 
tive agency or any administrative unit 
thereof; 

"(3) 'leave bank' means a leave bank estab- 
lished under section 6363; 

"(4) 'leave contributor' means an employ- 
ee who contributes leave to an agency leave 
bank under section 6365; 

"(5) 'leave recipient' means an employee 
whose application under section 6367 to re- 
ceive contributions of leave from a leave 
bank is approved; and 

"(6) 'medical emergency' means a medical 
condition of an employee or a family 
member of such employee that is likely to 
require the prolonged absence of such em- 
ployee from duty and to result in a substan- 
tial loss of income to such employee because 
of the unavailability of paid leave. 
"§ 6362. General authority 

"(a) Notwithstanding any provision of 
subchapter I, and subject to the provisions 
of this subchapter, the Office of Personnel 
Management shall establish a program 
under which— 

"(1) annual leave accrued or accumulated 
by an employee may be contributed to a 
leave bank established by the employing 
agency of such employee; and 

"(2) leave from such a leave bank may be 
made available to an employee who requires 
such leave because of a medical emergency. 
"(b) To test voluntary leave bank pro- 
grams under the provisions of this subchap- 
ter, the Office of Personnel Management 
shall establish a demonstration project in at 
least 3 Executive agencies, of which— 

"(1) one such agency shall include ap- 
proximately, but not less than, the equiva- 
lent of 100,000 full-time positions; 

"(2) one such agency shall include ap- 
proximately, but not less than, the equiva- 
lent of 25,000 full-time positions; and 



I 

j 






28382 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



"(3) one such agency shall include ap- 
proximately, but not less than, the equiva- 
lent of 1,000 full-time positions. 
"§ 6363. Establishment of leave banks 

"Each agency that establishes a leave 
bank program under section 6362 shall es- 
tablish 1 or more leave banks in accordance 
with regulations prescribed by the Office of 
Personnel Management. 
"S 6364. Establishment of Leave Bank Boards 

"(a)(1) Each agency that establishes a 
leave bank shall establish a Leave Bank 
Board consisting of 3 members, at least one 
of whom shall represent a labor organiza- 
tion or employee group, to administer the 
leave bank under the provisions of this sub- 
chapter, in consultation with the Office of 
Personnel Management. 

"(2) An agency may establish more than 1 
Leave Bank Board based upon the adminis- 
trative units within the agency. No more 
than 1 board may be established for each 
leave bank. 

"(b) Each such Board shall— 

"(1) review and approve applications to 
the leave bank under section 6367; 

"(2) monitor each case of a leave recipient; 
and 

"(3) monitor the amount of leave in the 
leave bank and the number of applications 
for use of leave from the bank; and 

"(4) maintain an adequate amount of 
leave in the leave bank to the greatest 
extent practicable. 
"§ 6365. Contributions of annual leave 

"(a)(1) An employee may, by written ap- 
plication to the Leave Bank Board, request 
that a specified number of hours be trans- 
ferred from the annual leave account of 
such employee to the leave bank established 
by such agency. 

"(2) An employee may state a concern and 
desire to aid a specified proposed leave re- 
cipient or a leave recipient in the applica- 
tion filed under paragraph (1). 

"(b)(1) Upon approving an application 
under subsection (a), the employing agency 
of the leave contributor may transfer all or 
any part of the number of hours requested 
for transfer, except that the number of 
hours so transferred may not exceed the 
limitations under paragraph (2). 

"(2)(A) In any one leave year, a leave con- 
tributor may contribute no more than a 
total of one-half of the amount of annual 
leave such contributor would be entitled to 
accrue during the leave year in which the 
contribution is made. 

"(B) A leave contributor who is projected 
to have annual leave that otherwise would 
be subject to forfeiture at the end of the 
leave year under section 6304(a) may con- 
tribute no more than the number of hours 
remaining in the leave year (as of the date 
of the contribution) for which the leave 
contributor is scheduled to work and receive 
pay. 

"(c) The Leave Bank Board of a leave con- 
tributor may waive the limitations under 
subsection (b)(2). Any such waiver shall be 
in writing. 

"(d) The Office of Personnel Management 
shall prescribe regulations establishing an 
open enrollment period during which an 
employee may contribute leave under sub- 
section (a) for a leave year. 
"§ 6366. Eligibility for leave recipients 

"(a) An employee is eligible to be a leave 
recipient if such employee— 

"(1) experiences a medical emergency and 
submits an application pursuant to section 
6367(a); and 



"(2)(A) contributes the minimum number 
of hours as required under subsection (b) of 
accrued or accumulated annual leave to the 
leave bank of the employing agency of such 
employee, in the leave year (beginning in 
and including any part of a leave year in 
which such leave bank is established) that 
such employee submits an application to be 
a leave recipient under section 6367(a); and 
"(B) such contribution is made before 
such employee submits an application under 
section 6367(a). 

"(b)(1) An employee shall contribute the 
minimum number of hours required under 
subsection (a)(2)(A), if such employee is an 
employee— 

"(A) for less than 3 years of service and 
contributes a minimum of 4 hours; 

"(B) for between 3 years and less than 15 
years of service and contributes a minimum 
of 6 hours; or 

"(C) for 15 years or more of service and 
contributes a minimum of 8 hours. 

"(2) Notwithstanding the provisions of 
paragraph (1), the Leave Bank Board of an 
agency, after consultation with the Office 
of Personnel Management, may— 

"(A) reduce the minimum number of 
hours required under paragraph (1) for any 
leave year, if such Board determines there is 
a surplus of leave in the leave bank; and 

"(B) increase the number of minimum 
hours required under paragraph (1) for the 
succeeding leave year, in any leave year in 
which the Board determines there is a 
shortage of leave in the leave bank. 

"(c) An employee shall meet the require- 
ments of subsection (a)(2)(A) if such em- 
ployee contributes the minimum number of 
hours as required under subsection (b) of ac- 
crued or accumulated annual leave to the 
leave bank with which such employee sub- 
mits an application to be a leave recipient 
under section 6367(a). 

"(d) The provisions of subsection (a) may 
not be construed to limit the amount of the 
voluntary contribution of annual leave to a 
leave bank, which does not exceed the limi- 
tations of section 6365(b). 
"§ 6367. Receipt and use of leave from a leave 
bank 

"(a) An application to receive contribu- 
tions of leave from a leave bank, whether 
submitted by or on behalf of an employee— 
"(1) shall be submitted to the Leave Bank 
Board of the employing agency of the pro- 
posed leave recipient; and 
"(2) shall include— 

"(A) the name, position title, and grade or 
pay level of the proposed leave recipient; 

"(B) the reasons why leave is needed, in- 
cluding a brief description of the nature, se- 
verity, anticipated duration, and, if it is a re- 
curring one, the approximate frequency of 
the medical emergency involved; 

"(C) if such Board so requires, certifica- 
tion from 1 or more physicians, or other ap- 
propriate experts, with respect to any 
matter under subparagraph (B); and 

"(D) any other information which such 
Board may reasonably require. 

"(3) If a Board requires that an employee 
obtain certification under paragraph (2)(C) 
from 2 or more sources, the agency shall 
ensure, either by direct payment to the 
expert involved or by reimbursement, that 
the employee is not required to pay for the 
expenses associated with obtaining certifica- 
tion from more than 1 of such sources. 

"(b) The Leave Bank Board of an employ- 
ing agency may approve an application sub- 
mitted under subsection (a). 

"(c) A leave recipient may use annual 
leave received from the leave bank estab- 



lished by the employing agency of such em- 
ployee under this subchapter in the same 
manner and for the same purposes as if 
such leave recipient had accrued such leave 
under section 6303, except that any annual 
leave and, if applicable, any sick leave ac- 
crued or accumulated to the leave recipient 
shall be used before any leave from the 
leave bank may be used. 
"(d) Transferred annual leave— 
"(1) may accumulate without regard to 
any limitation under section 6304; and 

"(2) may be substituted retroactively for 
any period of leave without pay, or used to 
liquidate an indebtedness for any period of 
advanced leave, which began on or after a 
date fixed by the employing agency of the 
employee as the beginning of the medical 
emergency involved. 

"(e) Except to the extent that the Office 
of Personnel Management may prescribe 
regulations, nothing in the provisions of sec- 
tion 7351 shall apply to any solicitation, 
contribution, or use of leave to or from a 
leave bank under this subchapter. 
"§ 6368. Termination of medical emergency 

"(a) The medical emergency affecting a 
leave recipient shall, for purposes of this 
subchapter, be considered to have terminat- 
ed on the date as of which— 

"(1) the leave recipient notifies the Leave 
Bank Board in writing, that the medical 
emergency no longer exists; 

"(2) the Leave Bank Board of such leave 
recipient determines, after written notice 
and opportunity for the leave recipient (or, 
if appropriate, another person acting on 
behalf of the leave recipient) to answer 
orally or in writing, that the medical emer- 
gency no longer exists; or 

"(3) the leave recipient is separated from 
service. 

"(b)(1) The Leave Bank Board of a recipi- 
ent shall, consistent with guidelines pre- 
scribed by the Office of Personnel Manage- 
ment, establish procedures to ensure that a 
leave recipient is not permitted to use or re- 
ceive any transferred leave under this sub- 
chapter after the medical emergency termi- 
nates. 

"(2) Nothing in section 5551, 5552, or 6306 
shall apply with respect to any annual leave 
transferred to a leave recipient under this 
subchapter. 
"§ 6369. Restoration of transferred leave 

"The Office of Personnel Management 
shall establish procedures under which any 
transferred leave remaining to the credit of 
a leave recipient when the medical emergen- 
cy affecting the leave recipient terminates, 
shall be restored to the leave bank. 
"§ 6370. Prohibition of coercion 

"(a) An employee may not directly or indi- 
rectly intimidate, threaten, or coerce, or at- 
tempt to intimidate, threaten, or coerce, any 
other employee for the purpose of interfer- 
ing with any right which such employee 
may have with respect to contributing, re- 
ceiving, or using annual leave under this 
subchapter. 

"(b) For the purpose of subsection (a), the 
term 'intimidate, threaten, or coerce' in- 
cludes promising to confer or conferring any 
benefit (such as an appointment, promotion, 
or compensation), or effecting or threaten- 
ing to effect any reprisal (such as depriva- 
tion of appointment, promotion, or compen- 
sation). 
"§ 6371. Accrual of leave 

"While using leave made available to an 
employee from a leave bank, annual and 
sick leave shall accrue to the credit of such 



October 5, 1988 

employee and shall become available for use 
by such employee in the same manner as 
provided for under section 6337. 
"§ 6372. Additional leave bank programs 

"(a) For the purpose of this section— 

"(1) the term 'excepted agency' has the 
same meaning as such term is defined under 
section 6338(a)(1) of this title; and 

"(2) the term 'head of an excepted agency' 
has the same meaning as such term is de- 
fined under section 6338(a)(2) of this title. 

"(b) Notwithstanding any other provision 
of this subchapter, neither an excepted 
agency nor any individual employed in or 
under an excepted agency may be included 
in a leave bank program established under 
any of the preceding provisions of this sub- 
chapter. 

"(c)(1) The head of an excepted agency 
may, by regulation, establish a voluntary 
leave bank program under which annual 
leave accrued or accumulated by an employ- 
ee of such agency may be contributed to a 
leave bank, and any other employee of such 
agency may receive additional leave from 
such leave bank because of a medical emer- 
gency. . 

"(2) To the extent practicable, and con- 
sistent with the protection of intelligence 
sources and methods (if applicable), each 
program under this section shall be estab- 
lished in a manner consistent with the pro- 
visions of this subchapter applicable to the 
program. 

"(d) The Office of Personnel Management 
shall provide the head of an excepted 
agency with such advice and assistance as 
the head of such agency may request in 
order to carry out the purposes of this sec- 
tion. 
"§ 6373. Limitation on employee participation 

"An employee in a unit of an agency that 
establishes a leave bank program under the 
provisions of this subchapter may not par- 
ticipate in a leave transfer program under 
the provisions of subchapter III.". 

(b) Conforming Amendment.— The table 
of sections for chapter 63 of title 5, United 
States Code, is amended by adding at the 
end thereof the following: 

"SUBCHAPTER III-VOLUNTARY 
TRANSFERS OF LEAVE 

"Sec. 

"6331. Definitions. 
"6332. General authority. 
"6333. Receipt and use of transferred leave. 
"6334. Donations of leave. 
"6335. Termination of medical emergency. 
"6336. Restoration of transferred leave. 
"6337. Accrual of leave. 
"6338. Prohibition of coercion. 
"6339. Additional leave transfer programs. 
"6340. Inapplicability of certain provisions. 
"SUBCHAPTER IV-VOLUNTARY LEAVE 
BANK PROGRAM 



CONGRESSIONAL RECORD— SENATE 



28383 



"6361. Definitions. 

"6362. General authority. 

"6363. Establishment of leave banks. 

"6364. Establishment of Leave Bank 
Boards. 

"6365. Contributions of annual leave. 

"6366. Eligibility for leave recipients. 

"6367. Receipt and use of leave from a leave 
bank. 

"6368. Termination of medical emergency. 

"6369. Restoration of transferred leave. 

"6370. Prohibition of coercion. 

"6371. Accrual of leave. 

"6372. Additional leave bank programs. 

"6373. Limitation on employee participa- 
tion.", 
(c) Implementation of Leave Transfer 

and Leave Bank Programs.— (1) No later 



than 3 months after the date of the enact- 
ment of this Act, the Office of Personnel 
Management shall prescribe regulations to 
implement leave transfer programs pursu- 
ant to the amendments made by this Act. 

(2) No later than 6 months after the date 
of the enactment of this Act— 

(A) the head of each agency involved 
under sections 6332 and 6339 of title 5, 
United States Code, shall establish and 
begin operating a leave transfer program in 
accordance with applicable provisions of 
subchapter III of chapter 63 of title 5, 
United States Code, and applicable regula- 
tions prescribed by the Office; and 

(B) the Office of Personnel Management 
shall prescribe regulations to implement 
leave bank programs pursuant to the 
amendments made by this Act. 

(3) No later than 9 months after the date 
of the enactment of this Act, the head of 
each agency involved under section 6362 of 
title 5, United States Code, shall establish 
and begin operating a leave bank in accord- 
ance with subchapter IV of chapter 63 of 
title 5, United States Code, and applicable 
regulations prescribed by the Office. 

(d) Termination of Leave Transfer and 
Leave Bank Programs After 5 Years.— 
(1XA) Subchapters III and IV of chapter 63 
of title 5, United States Code, are repealed 
effective 5 years after the date of the enact- 
ment of this Act. 

(B) The table of sections for subchapter 

III and the table of sections for subchapter 

IV of chapter 63 of title 5, United States 
Code, are repealed effective 5 years after 
the date of the enactment of this Act. 

(2) If a leave transfer program under sub- 
chapter III of chapter 63 of title 5, United 
States Code, or the leave bank program 
under subchapter IV of such chapter, termi- 
nates before the termination of the medical 
emergency affecting a leave recipient under 
such program, any leave which was trans- 
ferred to the leave recipient before the ter- 
mination of the program shall remain avail- 
able for use (including by restoration to 
leave donors or leave contributors, as the 
case may be, and if applicable) as if the pro- 
gram had remained in effect. 

(3)(A) Any annual leave remaining in an 
agency's leave bank under subchapter IV of 
chapter 63 of title 5, United States Code, 
shall, upon the repeal of such subchapter be 
dispensed in accordance with subparagraph 
(B). 

(B) If there are any employees who, based 
on applications submitted before the effec- 
tive date of the repeal of such subchapter, 
are found (before, on, or after that date) to 
be eligible to receive leave in connection 
with any medical emergency, annual leave 
contributed to the leave bank before such 
date shall, until the last such emergency 
has terminated, remain available for use by 
any such employee under the same terms 
and conditions as if the program had re- 
mained in effect. 

(4) For the purpose of this subsection, 
"medical emergency", "leave recipient", 
"leave bank", and "employee" each has the 
meaning given that term under subchapter 
III or subchapter IV of chapter 63 of title 5, 
United States Code, as applicable. 

(e) Report to the Congress.— (IX A) 
Within 2 years after the date of the enact- 
ment of this Act and again no later than 6 
months before the scheduled termination 
date of any program under subchapter III 
or subchapter IV of chapter 63 of title 5, 
United States Code (excluding any program 
under sections 6339 and 6372 of such chap- 
ter) the Office of Personnel Management 



shall submit a written report to the Con- 
gress with respect to the operations of such 
programs. 

(B) The Office of Personnel Management 
may require agencies to maintain such 
records and to provide such information as 
the Office may need to carry out subpara- 
graph (A). 

(2) The excepted agencies that establish 
programs under sections 6339 and 6372 of 
title 5, United States Code, shall report to 
the Congress on the operation of such pro- 
grams within 2 years after the date of the 
enactment of this Act and again no later 
than 6 months before the scheduled termi- 
nation of any such programs. 

(f) Continuation of Temporary Leave 
Transfer Programs.— Any temporary pro- 
gram allowing for transfers of leave among 
officers or employees of the Federal Gov- 
ernment may, if such program is being im- 
plemented with respect to an agency (or any 
unit thereof) as of the date of the enact- 
ment of this Act, continue to be implement- 
ed with respect to such agency (or unit), 
notwithstanding any provision of law which 
would otherwise terminate the authority for 
such program, pending the commencement 
of a leave transfer program with respect to 
such agency pursuant to amendments made 
by this Act. The Office of Personnel Man- 
agement (or, in the case of a program estab- 
lished by another agency, such other 
agency) shall prescribe regulations to 
ensure that any leave which has been trans- 
ferred to the credit of an officer or employ- 
ee and which remains unused as of the date 
on which any such temporary program ter- 
minates (and a successor program com- 
mences pursuant to amendments made by 
this Act) shall not be lost by reason of that 
termination. 



SEC. 3. TRAVEL EXPENSES OF CAREER APPOINT- 
EES. 

Section 5724(a)(3)(A) of title 5, United 
States Code, is amended by striking out 
"during the five years preceding eligibility 
to receive an annuity under subchapter III 
of chapter 88, or of chapter 84 of this title, 
and thereafter" and inserting in lieu thereof 
"during or after the five years preceding eli- 
gibility to receive an annuity under sub- 
chapter III of chapter 88, or of chapter 84 
of this title". 

Sec. 4. Section 6 of the Civil Service Mis- 
cellaneous Amendments Act of 1983 (Public 
Law 98-224; 98 Stat. 49) is amended by strik- 
ing out "September 30, 1990," and inserting 
in lieu thereof "September 30, 1995.". 



ROTH AMENDMENT NO. 3422 
Mr. WILSON (for Mr. Roth) pro- 
posed an amendment to the bill, H.R. 
3757, supra; as follows: 

At the appropriate place in the bill, insert 
the following new section: 

Sec. . Section 8112 of title 5, United 
States Code, is amended— 

(1) by redesignating such section as sub- 
section (a) of section 8112; and 

(2) by adding at the end thereof the fol- 
lowing new subsection: 

"(b) The provisions of subsection (a) shall 
not apply to any employee whose disability 
is a result of an assault which occurs during 
an assassination or attempted assassination 
of a Federal official described under section 
351(a) of title 18, and was sustained in the 
performance of duty.". 



9 






s 



28384 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



NATIONAL SUPERCONDUCTIVITY 
AND COMPETITIVENESS ACT 



JOHNSTON AMENDMENT NO. 
3423 

Mr. BYRD (for Mr. Johnston for 
himself, Mr. Fowler, Mr. Domenici, 
Mr. Bingaman, and Mr. Bumpers) pro- 
posed an amendment to the bill (H.R. 
3048) to establish a national Federal 
program effort in close collaboration 
with the private sector to develop as 
rapidly as possible the applications of 
superconductivity to enhance the Na- 
tion's economic competitiveness and 
strategic well-being, and for other pur- 
poses; as follows: 

1. Strike all after the enacting clause and 
insert in lieu thereof the following: 

"That this Act may be cited as the 'Re- 
search Initiatives and Technology Competi- 
tiveness Act of 1988'. 

"Title I— Superconductivity and 
Competitiveness 
"sec. 101. short title. 

"This title may be cited as the 'National 
Superconductivity and Competitiveness Act 
of 1988'. 

"SEC. 102. FINDINGS AND PURPOSES. 

"(a) Findings.— For purposes of this title. 
Congress finds that— 

"(1) recent discoveries of high-tempera- 
ture superconducting materials could result 
in significant new applications of these ma- 
terials in such areas as microelectronics, 
computers, power systems, transportation, 
medical imaging, and nuclear fusion, yet 
most potential applications may well lie 
beyond our ability to predict them; 

"(2) full application of the new supercon- 
ductors is expected to require 10 to 20 years, 
thus calling for long-term commitments by 
the public and private sector to appropriate 
research and development programs; 

"(3) the Nation's economic competitive- 
ness and strategic well-being depend greatly 
on the development and application of criti- 
cal advanced technologies such as those an- 
ticipated to evolve from the new supercon- 
ducting materials; 

"(4) the United States manufacturing in- 
dustries confront strong competition in both 
domestic and world markets as other coun- 
tries are increasingly taking advantage of 
modern technology and production tech- 
niques and innovative management focused 
on quality; 

"(5) whereas we have as a Nation been 
highly successful in the conduct of basic re- 
search in a variety of scientific areas, includ- 
ing superconductivity, other nations have 
been highly successful in the commercial 
and military application of the results of 
such fundamental research; 

"(6) if the United States is to regain its 
competitive advantage, it must commit suf- 
ficient long-term resources to solving proc- 
essing and manufacturing problems in par- 
allel with basic research and development; 

"(7) Federal agencies have responded ag- 
gressively to this exciting challenge by re- 
programming funds to basic superconducti- 
vity research while informally coordinating 
their efforts to avoid unnecessary duplica- 
tion; and further commitment of Federal 
funding and efforts directed to developing 
manufacturing, materials processing, and 
fabrication technologies is essential so that 
these activities may be conducted in paral- 
lel; 



"(8) successful development and applica- 
tion of the new superconducting materials 
will require close collaboration between the 
Federal Government and the industrial and 
academic components of the private sector, 
as well as coordinating among the Federal 
departments and agencies involved in re- 
search and development on superconduc- 
tors; 

"(9) a committed Federal programs effort 
with appropriate long-term goals, priorities, 
and adequate resources is necessary for the 
rapid development and application of the 
new superconducting materials; and 

"(10) a national program should serve as a 
test of new agency authorities directed at 
technological competitiveness such as those 
provided to the Department of Energy. 

"(b) Purposes.— The purposes of this title 
are— 

"(1) to establish a 5-year national action 
plan to research and develop new high-tem- 
perature superconducting materials with ap- 
propriate goals and priorities; and 

"(2) to designate the appropriate roles, 
mechanisms, and responsibilities of various 
Federal departments and agencies in imple- 
menting such a national research and devel- 
opment action plan.". 

"SEC. 103. NATIONAL ACTION PLAN ON SUPERCON- 
DUCTIVITY RESEARCH AND DEVELOP- 
MENT. 

"(a) Establishment.— (1) The Director of 
the Office of Science and Technology Policy 
shall establish a 5-year National Action 
Plan on Advanced Superconductivity Re- 
search and Development (hereinafter in this 
title referred to as the 'Superconductivity 
Action Plan'). 

"(2) The Office of Science and Technolo- 
gy Policy shall coordinate the development 
of the Superconductivity Action Plan and 
any recommendations required by this Act 
with the National Critical Materials Council 
and the National Committee on Supercon- 
ductivity. 

"(b) Content and Scope.— The Supercon- 
ductivity Action Plan shall include— 

"(1) goals and priorities for advanced su- 
perconductivity research and development 
to be carried out by individual departments 
and agencies and organizational elements 
therein; 

"(2) the assignment of responsibility for 
the conduct of advanced superconductivity 
research and development among the de- 
partments, agencies, and organization ele- 
ments therein; 

"(3) recommendation of proposed funding 
levels for activities relating to superconduc- 
tivity of the 5 years following the date of 
enactment of this title for each of the par- 
ticipating departments, agencies, and orga- 
nizational elements therein; and 

"(4) proposals for the participation by in- 
dustry and academia in the planning and 
implementation of the Superconductivity 
Action Plan. 

"(c) Action Plan Report.— The Office of 
Science and Technology Policy, in conjunc- 
tion with the National Critical Materials 
Council, shall submit a report detailing the 
Superconductivity Action Plan to the Com- 
mittee on Science, Space and Technology of 
the House of Representatives, and to the 
Committees on Energy and Natural Re- 
sources, and Commerce, Science, and Trans- 
portation of the Senate, within 9 months 
after the date of enactment of this title. 

"(d) Update Reports.— The Office of Sci- 
ence and Technology Policy, with the assist- 
ance of the National Critical Materials 
Council as specified in the National Critical 
Materials Act of 1984 (30 U.S.C. 1801 et 



seq.), shall prepare an annual report setting 
forth and evaluating the progress of the Su- 
perconductivity Action Plan. This report 
shall include a description of the amount of 
funds expended in the previous year by all 
Federal departments and agencies involved 
with superconductivity. This report shall be 
submitted with the President's annual 
budget request to the Committee on Sci- 
ence, Space, and Technology of the House 
of Representatives, and to the Committees 
on Energy and Natural Resources, and Com- 
merce, Science, and Transportation of the 
Senate. 

"SEC. 104. DEPARTMENT OF ENERGY. 

"The Secretary of Energy shall conduct a 
program in superconductivity research and 
development in accordance with the provi- 
sions of subtitle A of title II. Within 180 
days after the date of enactment of this 
title, and for the two succeeding years 
thereafter, the Secretary shall submit 
annual reports on the implementation of 
technology transfer activities under the Ste- 
venson-Wydler Technology Innovation Act 
of 1980, title II of this Act, and related law 
with respect to superconductivity research 
and development to the Committee on Sci- 
ence, Space, and Technology of the House 
of Representatives and to the Committee on 
Energy and Natural Resources of the 
Senate. Such report shall include recom- 
mendations for improvements in the tech- 
nology transfer between government and in- 
dustry, and in the management of property 
developed or made at the National Labora- 
tories. 

"SEC. 105. NATIONAL INSTITUTE OF STANDARDS 
AND TECHNOLOGY. 

"In pursuance of the goals of this title, 
the National Institute of Standards and 
Technology shall promote fundamental re- 
search and materials standards to accelerate 
the use and application of the new super- 
conducting materials, and shall utilize the 
Superconductivity Center focusing on elec- 
tronic applications at the National Institute 
of Standards and Technology in Boulder, 
Colorado. 

"SEC. 106. NATIONAL SCIENCE FOUNDATION. 

"The National Science Foundation shall 
promote fundamental research in pursuance 
of the goals of this title. 

"SEC. 107. NATIONAL AERONAUTICS AND SPACE AD- 
MINISTRATION. 

"The National Aeronautics and Space Ad- 
ministration shall utilize existing programs 
in technology transfer, aeronautics and 
space technology, and space commercializa- 
tion to promote the commercial applications 
of high-temperature superconductors, in- 
cluding applications relating to thin film 
technology, communications technology, 
sensors, space power, and propulsion. 

"SEC. 108. DEPARTMENT OF DEFENSE. 

"(a) Focus of Research.— In conformance 
with the Superconductivity Action Plan, the 
Secretary of Defense, in the superconducti- 
vity research and development activities of 
the Department of Defense, shall give em- 
phasis to fundamental research, materials 
processing, and applications of new super- 
conducting materials. 

"(b) Additional Activities.— In conduct- 
ing research under subsection (a), the Secre- 
tary of Defense shall— 

"(1) systematically define the engineering 
parameters for high-temperature supercon- 
ducting materials; and 

"(2) conduct the necessary development, 
engineering, and operation prototype test- 
ing considered appropriate to the overall 
mission of the Department of Defense. Such 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28385 



operational prototype testing shall, where 
appropriate, utilize criteria developed by the 
Defense Advanced Research Projects 

Agency. _ 

"(c) Defense Advanced Research 
Projects AGENCY.-The Director of the De- 
fense Advanced Research Projects Agency 
shall, in conformance with the Supercon- 
ductivity Action Plan, conduct activities to— 
"(1) augment, as appropriate, basic and 
applied superconductivity research conduct- 
ed in other federal agencies and industry; 

"(2) develop criteria for operational proto- 
type testing within the Department of De- 
fense. 

"SEC. 109. INTERNATIONAL COOPERATION. 

"The President, as part of the Supercon- 
ductivity Action Plan, shall establish a pro- 
gram of international cooperation in the 
conduct of fundamental and basic research 
on superconducting materials. Such pro- 
gram of international cooperation shall in- 
clude the exchange of basic information and 
data, as well as the development of interna- 
tional standards for the use and application 
of superconducting materials. 

"SEC. 110. TECHNOLOGY TRANSFER. 

"(a) Promotion.— In pursuance of the 
goals of this title, all Federal departments 
and agencies shall conduct technology 
transfer activities as appropriate to the 
overall mission of each department or 
agency to— 

"(1) complement basic superconductivity 
research by promoting the rapid develop- 
ment of manufacturing and processing tech- 
nologies necessary for the commercializa- 
tion of high-temperature superconductors; 

and 

"(2) promote collaborative arrangements 
and consortia of industry (which shall in- 
clude small business) in order to lower the 
barriers to deployment of advanced high- 
temperature superconductor technology; 
such consortia to also include, as appropri- 
ate, universities and independent research 
organizations. 

"(b) Impediments to Commercializa- 
tion.— The Director of the Office of Science 
and Technology Policy, in collaboration 
with the Secretary of Commerce and the 
Secretary of Energy, shall identify those 
Federal policies and regulations which 
impede the ability of the private sector to 
undertake long-term investment programs 
to commercialize superconductivity applica- 
tions. 

"Title II— National Laboratory 
Cooperative Research Initiatives 

"sec. 201. short title. 

"This title may be cited as the 'Depart- 
ment of Energy National Laboratory Coop- 
erative Research Initiatives Act'. 

"SEC. 202. DEFINITIONS. 

"For purposes of this title, the term— 

"(a) 'National Laboratory' means the fol- 
lowing Department of Energy laboratories— 

"(1) Lawrence-Livermore National Labora- 
tory; 

"(2) Lawrence-Berkeley National Labora- 
tory; 

"(3) Los Alamos National Laboratory; 

"(4) Sandia National Laboratory; 

"(5) Fermi National Accelerator Laborato- 
ry; 

"(6) Princeton Plasma Physics Laborato- 
ry; 

"(7) Idaho National Engineering Labora 

tory; 
"(8) Argonne National Laboratory; 
"(9) Brookhaven National Laboratory; 



"(10) Oak Ridge National Laboratory, in- 
cluding the Y-12 Plant; 
"(11) Pacific Northwest Laboratory; 
"(12) Ames Laboratory; 
"(13) Stanford Linear Accelerator Center; 
"(14) Bates Linear Accelerator Facility; 
"(15) Center for Energy and Environment 

"(16) Coal Fired Flow Facility; 

"(17) Energy Technology Engineering 
Center* 

"(18) Hanford Engineering Development 
Laboratory; 

"(19) Inhalation Toxicology Research In- 
stitute; „ , . 

"(20) Laboratory for Energy-Related 
Health Research; 

"(21) Laboratory of Biomedical and Envi- 
ronmental Sciences; 

"(22) Laboratory of Radiology and Enviro- 
mental Health; 

"(23) Michigan State University-DOE 
Plant Research Laboratory; 

"(24) Notre Dame Radiation Laboratory; 

"(25) Oak Ridge Associated Universities; 

"(26) Radiobiology Laboratory; 

"(27) Savannah River Ecology Laboratory; 

"(28) Savannah River Laboratory; 

"(29) Solar Energy Research Institute; 

and ^ j- *. 

"(30) Stanford Synchrotron Radiation 

Laboratory. 

"Such term also includes any future govern- 
ment-owned, contractor-operated laboratory 
facilities established as Department of 
Energy Multi-program Laboratories or Pro- 
gram-Dedicated Facilities. Such term does 
not include Naval Nuclear Propulsion Reac- 
tor Laboratories, or their contractors or sub- 
contractors performing work covered under 
Executive Order 12344, as codified in section 
7158 of title 42, United States Code. 

"(b) 'Secretary' means the Secretary of 
Energy. 

"(c) 'Federal Agency' means any executive 
agency as defined in section 105 of title 5, 
United States Code, and the military de- 
partments defined by section 102 of title 5, 
United States Code. 

"(d) 'contract' means any contract, grant, 
or cooperative agreement as those terms are 
used in sections 6303, 6304, and 6305 of title 
31, United States Code, entered into be- 
tween any Federal agency and any contrac- 
tor for the performance of experimental, de- 
velopmental, or research work funded in 
whole or in part by the Federal Govern- 
ment. Such term includes any assignment, 
substitution of parties, or subcontract of 
any type entered into for the performance 
of experimental, developmental, or research 
work under a contract. 

"(e) 'cooperative research and develop- 
ment agreement' means any agreement be- 
tween one or more National Laboratories 
and one or more federal or non-federal par- 
ties under which the Government, through 
its National Laboratories, provides person- 
nel, services, facilities, equipment, or other 
resources with or without reimbursement 
and the non-federal parties provide funds, 
personnel, services, facilities, and equip- 
ment, or other resources toward the conduct 
of specified research, development, and 
demonstration efforts that are consistent 
with the missions of the National Laborato- 
ry; except that such term does not include a 
procurement contract or cooperative agree- 
ment as those terms are used in sections 
6303, 6304, and 6305 of title 31, United 
States Code. 

"(f) 'funding agreement means any con- 
tract, grant, or cooperative agreement en- 
tered into between the Secretary of Energy 



and a contractor operating a National Labo- 
ratory of the Department of Energy that 
provides for such contractor to perform re- 
search and development at such National 
Laboratory. 



"SEC. 203. POLICY. 

"(a) It is a mission of the National Labora- 
tories to foster, through the transfer of 
technology to the private sector consistent 
with the national security and a fair return 
on the taxapyers' investment, the commer- 
cialization of technologies developed in con- 
nection with activities of such Laboratories 
authorized under title I, subtitle A of this 
title, and other law. 

"(b) The Secretary shall take such actions 
as he finds appropriate and consistent with 
law to further the mission set forth in sub- 
section (a). 

"SUBTITLE A— THE DEPARTMENT OF ENERGY NA- 
TIONAL LABORATORIES CENTERS FOR RESEARCH 
ON ENABLING TECHNOLOGIES FOR HIGH TEM- 
PERATURE SUPERCONDUCTING APPLICATIONS. 

"SEC. 210. FINDINGS. 

"For purposes of this subtitle, Congress 
finds that: 

"(1) the Department of Energy has con- 
ducted extensive research in superconduct- 
ing materials to support its programmatic 
activities in High Energy Physics, Magnetic 
Fusion Energy, Energy Storage Systems, 
Electric Energy Systems, and Energy Con- 
servation, pursuant to the Federal Nonnu- 
clear Energy Reseach and Development Act 
of 1974 (P.L. 93-577), the Energy Reorgani- 
zation Act of 1974 (P.L. 93-483), and the De- 
partment of Energy Organization Act (P.L. 
95-91); 

"(2) recent developments in high-tempera- 
ture superconducting materials hold great 
promise for highly efficient energy storage 
and transmission, medical diagnostics, mag- 
nets for physics research and fusion reac- 
tors, and smaller supercomputers; 

"(3) the United States is a world leader in 
basic research on high-temperature super- 
conducting materials, and programs sup- 
porting this research at the Department of 
Defense, the National Science Foundation, 
and the Department of Energy should be 
maintained and strengthened; 

"(4) international interest in the commer- 
cialization of high-temperature supercon- 
ducting materials is high and the key to suc- 
cess in commercialization lies in the rapid 
development of these materials and the 
identification of their applications; and 

"(5) the National Laboratories have dem- 
onstrated expertise in high-temperature su- 
perconductivity research and a proven 
record in research in enabling technologies 
which can benefit industrial efforts in prod- 
uct development. 

"SEC. 211. PURPOSES. 

"The purposes of this subtitle are— 

"(1) to provide for research on critical en- 
abling technologies to assist United States 
industry in the commercialization of high- 
temperature superconductors; 

"(2) to provide national organization and 
coordination in the research, development 
and commercialization of high-temperature 
superconductors; and 

"(3) to encourage private industry, univer- 
sity, and National Laboratory interaction 
through centers for research on enabling 
technologies for high-temperature super- 
conductivity at the National Laboratories. 









28386 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



"SEC. 212. ESTABLISHMENT OF THE HIGH TEMPER- 
ATURE SUPERCONDUCTOR RESEARCH 
INITIATIVE. 

"The Secretary of Energy shall Initiate 
and carry out a cooperative program of re- 
search on enabling high-temperature super- 
conductor technology and on the practical 
applications of such technology (hereafter 
in this subtitle referred to as the 'Initia- 
tive'). 

"SEC. 213. PARTICIPATION OF NATIONAL LABORA- 
TORIES. 

"(a) Mission of National Laboratories.— 
The Secretary shall ensure that the Nation- 
al Laboratories participate in the Initiative, 
to the extent that such participation does 
not detract from the primary mission of any 
participating National Laboratory. 

"(b) Agreements.— The Secretary shall 
enter into such agreements with other Fed- 
eral agencies, with U.S. private industrial or 
research organizations, or consortia, or with 
any college or university, as may be neces- 
sary to provide for the active participation 
of the National Laboratories in the Initia- 
tive. 

"(c) Required Provisions.— The Initiative 
shall include provisions for one or more Na- 
tional Laboratories to conduct research and 
development activities relating to research 
on high-temperature superconductivity. 
Such activities may include research and de- 
velopment in associated technologies includ- 
ing thin film and bulk ceramic synthesis 
and processing and the characterization of 
physical, chemical, and structural proper- 
ties in materials. 

"SEC. 214. FORMATION OF COUNCIL AND CENTERS 
FOR RESEARCH ON ENABLING TECH- 
NOLOGIES. 

"(a) Council.— The Secretary of Energy 
shall form the 'Council for Research on En- 
abling Technologies' (hereafter in this sub- 
title referred to as the 'Council') that shall 
be composed of representatives of appropri- 
ate government agencies, universities, and 
industry to provide advice to the Secretary 
in setting goals and strategies for th Initia- 
tive. The Council shall recommenu guide- 
lines for the release of the technical find- 
ings and developments made by the cooper- 
ative research centers established pursuant 
to subsection (b). Guidelines for releasing 
technical findings set forth by the Council 
shall be consistent with guidelines set forth 
by affected Federal agencies. 

"(b) COOPERATIVE RESEARCH CENTERS.— (1) 

The Secretary shall establish cooperative 
research centers in enabling technologies 
for high-temperature superconducting ma- 
terials and applications (hereafter in this 
subtitle referred to as "Centers") at one or 
more National Laboratories with appropri- 
ate university and private industry partici- 
pants. 

"(2) The Centers shall be located at Na- 
tional Laboratories that demonstrate exper- 
tise in— 

"(A) high-temperature superconductivity 
research; and 

"(B) research in associated technologies 
including— 

"(i) thin film and bulk ceramic synthesis 
and processing; and 

"(ii) characterization of physical, chemi- 
cal, and structural properties in materials. 

"(c) Avoidance of Duplication.— The 
Council shall keep apprised of activities 
taking place at the existing Research Cen- 
ters on Superconductivity and Superconduc- 
tivity Pilot Centers. In carrying out the re- 
sponsibilities of subsection (a), the Council 
shall recommend to the Secretary and such 
Centers measures to ensure that unneces- 



sarily duplicative research or activities are 
not being carried out at these Centers. 

"SEC. 215. PERSONNEL EXCHANGES. 

"The Initiative may include provisions for 
temporary exchanges of personnel between 
any domestic firm or university referred to 
in this subtitle and the National Laborato- 
ries that are participating in the Initiative. 
The exchange of personnel may be subject 
to such restrictions, limitations, terms and 
conditions as the Secretary considers neces- 
sary in the interest of national security. 

"SEC. 216. OTHER DEPARTMENT OF ENERGY RE- 
SOURCES. 

"(a) Availability of Resources.— The 
Secretary shall make available to other de- 
partments or agencies of the Federal Gov- 
ernment, and to any participant in research 
and development projects under the Initia- 
tive, any facilities, personnel, equipment, 
services, and other resources of the Depart- 
ment of Energy for the purpose of conduct- 
ing research and development projects 
under the Initiative. 

"(b) Reimbursement.— At his discretion, 
the Secretary may make facilities available 
under this section only to the extent that 
the cost of the use of such facilities is reim- 
bursed by the user. 

"SEC. 217. BUDGETING FOR HIGH-TEMPERATURE 
SUPERCONDUCTIVITY RESEARCH. 

"To the extent the Secretary considers ap- 
propriate and necessary, the Secretary, in 
preparing the research and development 
budget of the Department of Energy to be 
included in the annual budget submitted to 
the Congress by the President for fiscal 
years 1990, 1991, 1992, 1993, 1994, and 1995 
under section 1105(a) of title 31, United 
States Code, shall provide for programs, 
projects, and activities that encourage the 
development of new technology in the field 
of high-temperature superconductivity. 

"SEC. 218. COST-SHARING AGREEMENTS. 

"(a) Permitted Provisions.— The Secre- 
tary shall ensure that contracts for the op- 
eration of National Laboratories provide the 
director of each National Laboratory that is 
participating in the Initiative or the con- 
tractor operating any such National Labora- 
tory the authority to receive funds under 
any cooperative research and development 
agreement entered into with a domestic 
firm or university under the Initiative. 

(b) Considerations.— The director of each 
National Laboratory that is participating in 
the Initiative, in determining the type and 
extent of its laboratory participation in car- 
rying out work for others, shall undertake 
such work only when facilities are available 
and when it would not interfere with De- 
partment of Energy programs, and such 
work shall be conducted in such a way as to 
not create a future detrimental burden on 
the National Laboratory. 

(c) Limitations.— (1) An amount equal to 
not more than 10 percent of any National 
Laboratory's annual budget may be received 
from non-appropriated funds derived from 
work for others contracts entered into 
under the Initiative in any fiscal year, 
except to the extent appoved in advance by 
the Secretary. 

"(2) Under subsection (a) no National Lab- 
oratory may receive from any person more 
than $10,000,000 of non-appropriatiated 
funds, or the equivalent of such amount, 
under any cooperative research and develop- 
ment agreement entered into under the Ini- 
tiative, except to the extent approved in ad- 
vance by the Secretary. 



"SEC. 219. OVERSIGHT OF COOPERATIVE AGREE- 
MENTS RELATING TO THE INITIATIVE. 

"(a) Provisions Relating to Disapproval 
and Modification of Agreements.— ( 1 ) The 
Secretary may review a cooperative research 
and development agreement for the purpose 
of disapproving or requiring the modifica- 
tion of the cooperative research and devel- 
opment agreement. Each such agreement 
shall provide a 30-day period within which 
the agreement may be disapproved or modi- 
fied by the Secretary beginning on the date 
the agreement is submitted to the Secre- 
tary. 

"(2) In any case in which the Secretary 
disapproves, or requires the modification of, 
any agreement submitted to the Secretary 
under this section, within 30 days after such 
submission, the Secretary shall transmit a 
written explanation of such disapproval or 
modification to the head of the National 
Laboratory concerned. 

"(b) Record of Agreements.— Each Na- 
tional Laboratory shall maintain a record of 
all agreements entered into under this sub- 
title section and submit such record to the 
Secretary on an annual basis. 

"SEC. 220. AVOIDANCE OF DUPLICATION. 

"In carrying out the Initiative, the Secre- 
tary shall ensure that unnecessarily duplica- 
tive research is not performed at the re- 
search facilities of the Department of 
Energy (including the National Laborato- 
ries) that are participating in the Initiative. 

"SUBTITLE B— TECHNOLOGY MANAGEMENT AT 
THE DEPARTMENT OF ENERGY NATIONAL LAB- 
ORATORIES 

"SEC. 231. FINDINGS AND PURPOSE. 

"(a) Findings.— For purposes of this sub- 
title, Congress finds that- 
'll) private industry has great interest in 
scientific collaboration with the National 
Laboratories but only if the present Depart- 
ment of Energy's present laboratory con- 
tracting process can be streamlined and in- 
tellectual property associated with joint 
ventures, adequately protected; 

"(2) contracts for the operation of the Na- 
tional Laboratories must provide the direc- 
tors of such Laboratories with sufficient 
management authority for intellectual 
property to ensure that the director can ne- 
gotiate with industry to set up cooperative 
research and development agreements. 

"(3) the authority provided to the direc- 
tors of the National Laboratories should be 
subject to periodic audit and oversight by 
the Secretary, the Inspector General and 
the Comptroller General as well as Con- 
gress. 

"(4) there should be timely, consistent 
review procedure to ensure that commer- 
cialization potential is considered when soft- 
ware is developed under a Department of 
Energy contract or may have involved some 
Department of Energy funding; 

"(5) the National Laboratories must be 
perceived as "user-friendly" in order for in- 
dustry to seriously consider the laboratories 
partners for collaborative research and de- 
velopment ventures; 

"(6) the National Laboratories must ag- 
gressively seek contact with private indus- 
tries to ensure that they recognize the tech- 
nical and scientific expertise resident in 
these laboratories, in addition to publicizing 
the availability of user facilities and techno- 
logical projects in progress; 

"(7) the National Laboratories have dem- 
onstrated successes in technology transfer 
into the private sector but the effort can be 
significantly enhanced if— 



October 5, 1988 



"(A) industry becomes more aware of the 
National Laboratory research and develop- 
ment projects and capabilities; 

"(B) technology transfer is considered a 
significant part of the National Laborato- 
ries' mission; 

"(C) the National Laboratories become 
better educated in industry market require- 
ments; and 

"(D) industry gets involved with the Na- 
tional Laboratories early enough in the re- 
search and development process to direct 
development of commercially viable prod- 
ucts; and 

"(8) nuclear weapons design, development, 
production, and maintenance must remain 
the primary mission of the Department of 
Energy nuclear weapons complex. 

"(b) Purpose.— The purpose of this sub- 
title is to better meet the continuing respon- 
sibility of the Federal Government to 
ensure the full use of the results of the Na- 
tion's Federal investment in the National 
Laboratories' research and development in 
meeting international competition. 

"SEC. 232. DUTIES AND AUTHORITIES OF THE SEC- 
RETARY. 

"(a)(1) The Secretary shall review all ex- 
isting regulations, policy guidelines, orders, 
directives, procedures, and administrative 
processes associated with the National Lab- 
oratories directors' ability to: 

"(A) enter into cooperative relationships 
and cooperative research and development 
agreements with private industry or univer- 
sities; 
"(B) undertake work-for-others; and 
"(C) operate user facilities. 
"(2) The Secretary shall review existing 
standards for resolving potential conflicts of 
interests to ensure that such standards ade- 
quately establish guidelines for situations 
likely to arise through the use of the au- 
thorities granted in this subtitle, including 
but not limited to cases where present or 
former National Laboratory employees or 
their partners negotiate licenses or assign- 
ments of titles to inventions or negotiate co- 
operative research and development agree- 
ments with Federal agencies (including the 
Department of Energy or the laboratory 
manager or operator with which the em- 
ployee involved is or was formerly em- 
ployed). 
"(b) The Secretary shall— 
"(1) review the impact of the exchange of 
scientific information, scientific innovation, 
and commercialization resulting from co- 
operative research and development agree- 
ments. 

"(2) survey non-federal parties interested 
in entering into cooperative research and 
development agreements with the National 
Laboratories to determine if adequate meas- 
ures exist to encourage scientific innovation 
and commercialization resulting from co- 
operative research and development agree- 
ments; and 

"(3) based on the results of such review 
and survey develop policy recommendations 
that shall be submitted to the Congress. 
"(c) The Secretary shall— 
"(1) formulate and carry out a compre- 
hensive set of policy guidelines to advance 
the goals of this subtitle, based on the 
review under subsection (a); 

"(2) report to Congress and the President 
within 90 days after the date of the enact- 
ment of this subtitle on the status of this 
review; and 

"(3) within 180 days after the date of the 
enactment of this subtitle, implement the 
policy guidelines under paragraph (1) that 



CONGRESSIONAL RECORD— SENATE 

require regulations under section 



28387 



do not 
242. 

"SEC. 233. POLICY. 

"It is the policy of Congress that— 

"(a) intellectual property rights in tech- 
nology developed at the National Laborato- 
ries be managed so as to promote the com- 
petitiveness of United States industries; 

"(b) the Secretary prescribe regulations 
for cooperative research and development 
agreements and intellectual property rights 
arising under such agreements; and 

"(c) the directors of the National Labora- 
tories devise implementing procedures con- 
sistent with the policy guidelines set by the 
Secretary. 

"SEC. 234. DEFINITIONS. 

"(a) For purposes of this subtitle, the 
term— 

"(1) 'collaborative party' means a party to 
a cooperative research and development 
agreement as defined in Section 202(e); 

"(2) 'computer software' means recorded 
information, regardless of form or the 
media on which it may be recorded, com- 
prising computer programs or documenta- 
tion thereof; 

"(3) 'director of a National Laboratory' 
means the employee of the Department of 
Energy laboratory manager or operator who 
directs the management and operation of 
such National Laboratory; 

"(4) 'intellectual property' means patents, 
trademarks, copyrights, mask works, and 
other forms of comparable property rights 
protected by federal law; 

"(5) 'invention' means any invention that 
is or may be patentable or otherwise pro- 
tected under Title 35, United States Code, 
or any novel variety of plant that is or may 
be protected under the Plant Variety Pro- 
tection Act (7 U.S.C. 2321 et seq.); 

"(6) 'laboratory manager or operator' 
means the contractor who has signed a con- 
tract with the Secretary for management 
and operation of a National Laboratory (but 
only with respect to activities relating to 
such management or operation); 

"(7) 'laboratory owned' means any rights 
in intellectual property conveyed under this 
title to a contractor operating a National 
Laboratory or any rights in intellectual 
property arising under the operating con- 
tract for a National Laboratory where 
rights are not expressly taken by the United 
States Government or by a subcontractor; 

"(8) 'made' when used in conjunction with 
any invention means the conception or first 
actual reduction to practice of such inven- 
tion; 

"(9) 'subject invention' means any inven- 
tion of a National Laboratory first con- 
ceived or reduced to practice in the perform- 
ance of work under a contract or funding 
agreement for the operation of a National 
Laboratory; 

"(10) 'third parties' means domestic enti- 
ties located in the United States who agree 
to manufacture and to conduct research, 
and development substantially in the 
United States including— 

"(A) Federal agencies other than the De- 
partment of Energy; 
"(B) units of State or local government; 
"(C) industrial organizations, such as cor- 
porations, partnerships, limited partner- 
ships, consortia, or industrial development 
organizations; 
"(D) public and private foundations; 
"(E) nonprofit organizations such as uni- 
versities; and 

"(F) licensees of inventions or computer 
software owned by the laboratory manager 
or operator. 



"SEC. 235. COOPERATIVE RESEARCH AND DEVEL- 
OPMENT AGREEMENTS. 

"(a) General Authority.— The Secretary 
shall prescribe regulations ensuring that 
the contract for the operation of any Na- 
tional Laboratory authorizes the director of 
such Laboratory: 

"(1) to enter into cooperative research and 
development agreements and to negotiate 
the terms and conditions of such agree- 
ments with— 

"(A) other federal agencies; 

"(B) units of state or local government; 

"(C) industrial organizations including 
corporations, partnerships, and limited part- 
nerships, consortia, and industrial develop- 
ment organizations; 

"(D) public and private foundations; 

"(E) nonprofit organizations including 
universities; or 

"(F) other persons or entities, including li- 
censees of inventions or computer software 
owned by the laboratory manager or opera- 
tor. 

"(2) to negotiate intellectual property li- 
censing agreements for National Laboratory 
owned inventions or computer software, as- 
signed or licensed to the National Laborato- 
ry by third parties including voluntary as- 
signment by employees. 

"(b) Specific Authority.— Each director 
of a National Laboratory may negotiate and 
include provisions in any cooperative re- 
search and development agreement entered 
into pursuant to this section permitting the 
laboratory manager or operator to— 

"(1) accept, retain, and use funds, person- 
nel, services, and property from collabora- 
tive parties and provide personnel, services, 
and property to collaborating parties; 

"(2) grant or agree to grant in advance to 
a collaborative party, intellectual property 
licenses, assignments, or options thereto, in 
any invention or computer software, made, 
in whole or in part, by an employee of a lab- 
oratory manager or operator under the co- 
operative research and development agree- 
ment; and 

"(3) to the extent consistent with Depart- 
ment of Energy regulations, orders, and di- 
rectives pertaining to conflict of interest, 
permit employees or former employees of a 
laboratory manager or operator to partici- 
pate in efforts to transfer to the private 
sector inventions or computer software, 
such employees developed or made while in 
the service of such laboratory manager or 
operator. 

"(c) Criteria for Entering Into Agree- 
ments.— In determining whether to enter 
into a cooperative research and develop- 
ment agreement the director of a National 
Laboratory shall determine that- 
'll) facilities at the National Laboratory 
will be available to do the work that is the 
subject of the cooperative research and de- 
velopment agreement; 

"(2) the work that is the subject of the co- 
operative research and development agree- 
ment would not interfere with Department 
of Energy programs; 

"(3) the work that is the subject of the co- 
operative research and development agree- 
ment would not create a future detrimental 
burden on the National Laboratory; and 

"(4) the proposed cooperative research 
and development agreement is consistent 
with applicable guidelines of the Secretary 
for cooperative research and development 
agreements. 

"(d) Approval of Agreement by Secre- 
tary.— The Secretary may disapprove or re- 
quire the modification of a cooperative re- 
search and development agreement under 















28388 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



subsection (a). Such agreement shall pro- 
vide a 30-day period beginning on the date 
the agreement is submitted to the Secretary 
by the director of the National Laboratory 
concerned, within which period such action 
may be taken by the Secretary. In any case 
in which the Secretary disapproves or re- 
quires the modification of any cooperative 
agreement submitted under this section, the 
Secretary shall transmit a written explana- 
tion of such disapproval or modification to 
the director of the National Laboratory con- 
cerned within 30 days after such submission. 
If such action is not taken within this thirty 
day period, the cooperative research and de- 
velopment agreement shall be deemed ap- 
proved. 

"(e) Limit on Percentage of the Total 
Work Cooperative Research and Develop- 
ment Agreements Can Comprise at the Na- 
tional Laboratories.— The cumulative total 
of non-appropriated funds contracted to be 
received in any year under all cooperative 
research and development agreements en- 
tered into by the director of any National 
Laboratory under this subtitle may not 
exceed an amount equal to 10 percent of the 
annual budget of such National Laboratory 
unless approved by the Secretary. 

"(f) Records of Agreements.— The direc- 
tor of each National Laboratory shall main- 
tain a record of all cooperative research and 
development agreements entered into under 
this subtitle, and shall submit a copy of 
such record to the Secretary on an annual 
basis. 

"SEC. 236. AGREEMENT CONSIDERATIONS. 

"In deciding which cooperative research 
and development agreements to enter into, 
and which licenses, assignments, and op- 
tions to grant, the director of a National 
Laboratory shall: 

"(a) give special consideration to small 
business firms and consortia involving small 
business firms; 

"(b) give preference to business units lo- 
cated in the United States that agree that 
products embodying inventions or computer 
software, made under the cooperative re- 
search and development agreement or pro- 
duced through the use of such inventions or 
computer software, will be developed and 
manufactured substantially in the United 
States; 

"(c) in the case of any industrial organiza- 
tions or other person subject to the control 
of a foreign company or government, as ap- 
propriate, take into consideration whether 
or not such foreign government permits 
United States agencies, organizations or 
other persons to enter into cooperative re- 
search and development agreements and li- 
censing agreements; and 

"(d) provide universities the opportunity 
to participate in such cooperative research 
and development agreements when such 
participation will contribute to the purpose 
of this subtitle. 

"SEC. 237. PATENT OWNERSHIP AND THE CONDI- 
TIONS OF OWNERSHIP. 

"(a) Disposal of Title to Investions.— 
Notwithstanding section 152 of the Atomic 
Energy Act of 1954 (42 U.S.C. 2182), section 
9 of the Federal Nonnuclear Energy Re- 
search and Development Act of 1974 (42 
U.S.C. 5908), or other provision of law, the 
Secretary shall dispose of the title to any 
subject invention made in the performance 
of a Department of Energy contract to oper- 
ate any National Laboratory in the same 
manner as applied to small business and 
nonprofit organizations under Chapter 18 of 
title 35, United States Code. 



"(b) Retention of Title by United 
States.— (1) Whenever a manager, operator 
or employee of a National Laboratory under 
a contract makes a subject invention to 
which the Secretary has determined (at the 
time of contracting for the management 
and operation of the National Laboratory) 
to retain title for exceptional circumstances 
under section 202(a)(ii) of title 35, United 
States Code, the title to the subject inven- 
tion shall be retained by the Government 
unless the National Laboratory at which the 
invention is made requests title to such in- 
vention and the Secretary does not notify 
the director of the National Laboratory 
within 90 days receipt of such request that 
the invention— 

"(A) is covered by a determination under 
such section 202(a)(ii); or 

"(B) has been classified or has been desig- 
nated sensitive technical information as au- 
thorized by Federal statutes. 

"(2) Whenever a manager or operator of a 
National Laboratory under a contract 
makes a subject invention to which the Sec- 
retary has determined (at the time of con- 
tracting for the management and operation 
of the National Laboratory) to retain title 
because the invention is made in the course 
of or under a funding agreement described 
in section 202(a)(iv) of title 35, United 
States Code, the title to the subject inven- 
tion shall be retained by the Government 
unless the National Laboratory at which the 
invention is made requests title to such in- 
vention and the Secretary does not notify 
the director of the National Laboratory 
within 90 days after receipt of such request 
that the invention— 

"(A) has been classified or has been desig- 
nated sensitive technical information as au- 
thorized by Federal statutes; and 

"(B) is covered by a determination under 
such subsection 202(a)(iv). 

"(3) The Secretary may not use export 
control statues or regulations as the sole 
basis for refusing a request for title to a sub- 
ject invention. 

"(4) If the Secretary does not notify a Na- 
tional Laboratory that has requested title to 
a subject invention in accordance with this 
section, such Laboratory shall be deemed to 
have elected title to the invention under the 
Government-wide contractor patentable 
ownership provisions of chapter 18 of title 
35, United States Code. 

"SEC. 238. SPECIAL RULE FOR WAIVER OF GOVERN- 
MENT LICENSE RIGHTS. 

"Any of the rights of the Government or 
obligations of a National Laboratory de- 
scribed in chapter 18 of title 35, United 
States Code, including the license reserved 
in section 202(c)(4) of title 35, United States 
Code, may be waived or omitted if the Sec- 
retary determines that the interests of the 
United States and the general public will be 
better served or the objectives and policies 
of this subtitle will be better promoted by 
such waiver or omission. A waiver or omis- 
sion shall be considered— 

"(a) if it is necessary to obtain a uniquely 
or highly qualified collaborative party; or 

"(b) if such waiver or omission relates to a 
subject invention involving cosponsored, 
cost sharing or joint venture research and 
development, and the contractor, cosponsor 
or joint venturer is making substantial con- 
tribution of funds, facilities or equipment to 
the work performed on such invention; or 

"(c) if the subject invention will require 
substantial additional investment in devel- 
opment before a product is created even if it 
is expected that the primary market for 



such product is the United States Govern- 
ment. 

"SEC. 239. INTELLECTUAL PROPERTY CONTRACT 
PROVISIONS. 

"(a) Contract Provisions.— Any Depart- 
ment of Energy funding agreement to oper- 
ate a National Laboratory shall provide— 

"(1) that any royalties or income that is 
earned by the manager or operator of a Na- 
tional Laboratory from the licensing of lab- 
oratory-owned intellectual property rights 
in any fiscal year shall be used as author- 
ized under subsection 202(c)(7)(E) of title 
35, United States Code and Section 
13(a)(1)(B) (i)-(iv) and section 13(a) (2)-(4) 
of the Stevenson-Wydler Technology Inno- 
vation Act of 1980 (15 U.S.C. 3710c(a)(l)(B) 
(i)-(iv) and 3710c(a) (2)-(4); and 

"(2) that the costs of obtaining and pro- 
tecting intellectual property rights in any 
invention or computer software, owned by 
the National Laboratory shall be paid for by 
the laboratory manager or operator as a 
cost shared expense under a cooperative re- 
search and development agreement. 

"(b) The Secretary shall ensure that all 
intellectual property granted to a laborato- 
ry manager or operator shall be subject to a 
royalty-free license to use and reproduce 
such intellectual property for United States 
Government purposes. 

"(c) The Secretary shall establish proce- 
dures to have the management of intellectu- 
al property rights, including procurement, 
retention, and licensing of such rights, in 
connection with laboratory-owned inven- 
tions and computer software, be the respon- 
sibility of the director of the National Labo- 
ratory at which the invention or computer 
software are made, developed or assigned. 

"(d) The Secretary shall prescribe regula- 
tions, orders, or directives prohibiting any 
laboratory manager or operator who has re- 
ceived title to intellectual property under 
this section from receiving money or other 
benefit from the use or licensing of such 
property for the benefit of the laboratory 
manager or operator, except for research 
and development associated with activities 
at the National Laboratory to promote tech- 
nology transfer as authorized by law, or in 
special circumstances, as may be approved 
by the appropriate Department of Energy 
Operations Office manager. 

"(e) Compensation.— (1) Subject to para- 
graph (2), in return for retaining title to any 
intellectual property rights in any invention 
or discovery made in performance of a De- 
partment of Energy cooperative research 
agreement, the manager or operator of any 
National Laboratory contractor shall pay to 
the United States reasonable compensation 
based on the value of the technology trans- 
ferred. The amount of the payment arising 
as a result of the transfer shall be set by an 
arbitration board consisting of one member 
selected by the contractor, one member se- 
lected by the Secretary, and one member 
jointly selected by the contractor and the 
Secretary. In determining the payment, the 
arbitration boards shall set an amount that 
is proportionate with the research and de- 
velopment costs funded by the United 
States. The arbitration board shall have dis- 
cretion to permit the payment to the made 
in installments according to the extent the 
contractor uses or employs the intellectual 
property. 
"(2) Paragraph (1) shall not apply if: 
"(A) the contractor is operating the Na- 
tional Laboratory for no profit or fee 
beyond expenses; and 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28389 



"(B) such contractor is offering the intel- 
lectual property for fair market value and 
any value or royalties the contractor derives 
from the intellectual property will be re- 
turned to the National Laboratory or the 
Federal Treasury in accordance with Sec- 
tion 202(c)(7)(E) of title 35, United States 
Code. 

"SEC. 240. MARCH-IN RIGHTS. 

"The Secretary may require the licensing 
to third parties of all intellectual property 
owned by the laboratory manager or opera- 
tor that is subject to the provisions of this 
subtitle in the same manner as provided 
under section 203 of title 35, United States 
Code. 

"SEC. 241. OVERSIGHT. 

"(a) The Secretary, the Inspector General 
of the Department of Energy, and the 
Comptroller General shall conduct periodic 
audits of activities of the National Laborato- 
ries under this subtitle. 

"(b) Nothing in this title diminishes the 
responsibility of the Secretary to keep Con- 
gress fully and currently informed or the 
right of Congress to review and receive in- 
formation with respect to any agreement, li- 
cense, or intellectual property subject to 
this title. 

"SEC. 242. REGULATIONS. 

"(a) Within 180 days after the date of the 
enactment of this subtitle, the Secretary 
shall prescribe regulations for implementing 
sections 235, 237 and 239. In prescribing reg- 
ulations under this section the Secretary 
shall provide opportunity for public com- 
ment on proposed regulations. 

"(b) Any regulations under this section 
shall be guided by the purpose of this sub- 
title. 

"(c) Before the Secretary issues regula- 
tions under this section, the Secretary shall 
consult and with the Office of Federal Pro- 
curement Policy to review such regulations 
for consistency with this subtitle. 

"SEC. 243. COPYRIGHTS AND PATENTS. 

"This title does not confer any new au- 
thority on the Department of Energy to 
obtain a copyright or a patent. 

"SEC. 243. EFFECTIVE DATE. 

"This subtitle shall take effect on the date 
of enactment. The Secretary shall immedi- 
ately enter into negotiations with each labo- 
ratory manager or operator to amend all ex- 
isting contracts for the operation of the Na- 
tional Laboratories, to reflect this subtitle. 
Pending such amendment, the provisions of 
this subtitle shall govern the disposition of 
all intellectual property rights covering lab- 
oratory owned inventions and computer 
software, generated in performance of De- 
partment of Energy contracts for the oper- 
ation of the National Laboratories. 
"Title III— Renewable Energy and Energy 

Efficiency 
"section 301. short title. 

"This title may be cited as the 'Renewable 
Energy and Energy Efficiency Technology 
Competitiveness Act of 1988'. 

"SEC. 302. PURPOSE. 

"Purpose.— It is the purpose of this title 
to direct the Secretary of Energy, acting in 
accordance with authority contained in the 
Federal Nonnuclear Energy Research and 
Development Policy Act of 1974 (42 U.S.C. 
5901-5920) and other law applicable to the 
Secretary, to pursue an aggressive national 
program of research, development, and dem- 
onstration of renewable energy and energy 
efficiency technologies in order to ensure a 
stable and secure future energy supply by— 

"(1) providing a long-term stable environ- 
ment for renewable energy and energy effi- 



ciency technology research and develop- 
ment activities through the establishment 
of long-term goals and multi-year funding 
levels; 

"(2) directing the Secretary to undertake 
initiatives to hasten the commercialization 
in the near term of renewable energy and 
energy efficiency technologies; and 

"(3) fostering collaborative research and 
development efforts involving the private 
sector through government support of a vig- 
orous program of innovative joint research 
and development venture projects. 

"SEC. 303. DEFINITIONS. 

"As used in this title the term— 
"(1) 'Secretary' means the Secretary of 
Energy; and 

"(2) 'joint research and development ven- 
ture' means a joint research and develop- 
ment venture under the National Coopera- 
tive Research Act of 1984 (98 Stat. 1815). 

"SEC. 304. NATIONAL GOALS AND MULTI-YEAR 
FUNDING FOR FEDERAL WIND, PHO- 
TOVOLTAICS AND SOLAR THERMAL 
PROGRAMS. 

"(a) National Goals— The following are 
declared to be the national goals for the 
wind, photovoltaics and solar thermal 
energy programs currently being carried out 
by the Secretary under existing law: 

"(1) Wind.— (A) In general, the goals for 
the Wind Energy Research Program include 
improving design methodologies and devel- 
oping more reliable and efficient wind tur- 
bines to increase the cost competitiveness of 
wind energy. Research efforts shall empha- 
size— 

"(i) activities that address near-term tech- 
nical problems and permit exploitation of 
current market opportunities of the wind 
energy industry; 

"(ii) developing advanced airfoils and vari- 
able speed generators to increase wind tur- 
bine output and reduce maintenance costs 
by decreasing structural stress and fatigue; 

"(iii) increasing the basic knowledge of 
aerodynamics, structural dynamics, fatigue 
and electrical systems interactions as ap- 
plied to current wind energy technology; 
and 

"(iv) improving the compatibility of elec- 
tricity produced from windfarms with con- 
ventional utility needs. 

"(B) Specific goals for the Wind Energy 
Research Program shall be to— 

"(i) reduce average wind energy costs to 3 
to 5 cents per kilowatt hour by 1995; 

"(ii) reduce capital costs of new wind 
energy systems to $500 to $750 per kilowatt 
of installed capacity by 1995; 

"(iii) increase installed wind generating 

capacity to 4000 to 8000 megawatts by 1995; 

"(iv) reduce operation and maintenance 

costs for wind energy systems to less than 

1.0 cents per kilowatt hour by 2000; and 

"(v) increase capacity factors for new wind 
energy systems to 25 to 30 percent by 1995. 
"(2) Photovoltaics.— (A) In general, the 
goals of the Photovoltaic Energy Systems 
Program shall include improving the reli- 
ability and conversion efficiencies and low- 
ering the costs of photovoltaic conversion. 
Research efforts shall emphasize advance- 
ments in the performance, stability and du- 
rability of photovoltaic materials. 

"(B) Specific goals of the Photovoltaic 
Energy Systems Program shall be to— 

"(i) improve operational reliability of pho- 
tovoltaic modules to 30 years by 1995; 

"(ii) increase photovoltaic conversion effi- 
ciency of new photovoltaic amorphous sili- 
con modules to 15 percent by 1995; 

"(iii) decrease new photovoltaic module 
direct manufacturing costs to $800 per kilo- 
watt by 1995; and 



"(iv) increase installed capacity of photo- 
voltaic electric power production capacity to 
100 to 200 megawatts by 1991. 

"(3) Solar thermal.— (A) In general, the 
goal of the Solar Thermal Energy Systems 
Program shall be to advance research and 
development to a point where solar thermal 
technology is cost-competitive with conven- 
tional energy sources and to promote the in- 
tegration of this technology into the pro- 
duction of industrial process heat and the 
conventional utility network. Research and 
development shall emphasize development 
of a thermal storage technology to provide 
capacity for shifting power to periods of 
demand when full insolation is not avail- 
able; improvement in receivers, energy con- 
version devices, and innovative concentra- 
tors using stretch membranes, lenses and 
other materials; and exploration of ad- 
vanced manufacturing techniques. 

"(B) Specific goals of the Solar Thermal 
Energy Systems Program shall be to— 

"(i) reduce solar thermal costs for indus- 
trial process heat to $9.00 per million Btu; 
and 

"(ii) reduce average solar thermal costs 
for electricity to 4 to 5 cents per kilowatt 
hour. 

"(4) The President's budget request for 
fiscal year 1991 shall contain the Secre- 
tary's recommendations for specific cost, in- 
stalled capacity, and other pertinent goals 
for 1995 for Department of Energy re- 
search, development, and demonstration 
programs in Biofuels Energy Systems, Solar 
Buidings Energy Systems, Ocean Energy 
Systems and Geothermal Energy. 

"(b) Authorization.— There is authorized 
to be appropriated to the Secretary— 

"(1) for the Wind Energy Research Pro- 
gram, an amount not to exceed $14,000,000 
in fiscal year 1990; $22,000,000 in fiscal year 
1991; and $26,000,000 in fiscal year 1992; 

"(2) for the Photovoltaic Energy Systems 
Program, an amount not to exceed 
$43,100,000 in fiscal year 1990; $45,000,000 in 
fiscal year 1991; and $50,000,000 in fiscal 
year 1992; 

"(3) for the Solar Thermal Energy Sys- 
tems Program, an amount not to exceed 
$19,000,000 in fiscal year 1990; $22,000,000 in 
fiscal year 1991; and $25,000,000 in fiscal 
year 1992; 

"(4) for the Biofuels Energy Systems Pro- 
gram, an amount not to exceed $22,000,000 
in fiscal year 1990; $25,000,000 in fiscal year 
1991; and $30,000,000 in fiscal year 1992; 

"(5) for the Solar Building Energy Sys- 
tems Program, an amount not to exceed 
$8,000,000 in fiscal year 1990; $9,000,000 in 
fiscal year 1991; and $10,000,000 in fiscal 
year 1992; 

"(6) for the Ocean Energy Systems Pro- 
gram, an amount not to exceed $5,000,000 in 
fiscal year 1990; $5,000,000 in fiscal year 
1991; and $5,000,000 in fiscal year 1992; and 
"(7) for the Geothermal Program, an 
amount not to exceed $25,000,000 in fiscal 
year 1990; $29,000,000 in fiscal year 1991; 
and $35,700,000 in fiscal year 1992. 

"(c) Projects.— (1) The President's budget 
request for fiscal year 1992 shall include the 
Secretary's recommendations for at least 
one proposed proof-of-concept or near-com- 
mercial demonstration project in each of 
the catagories represented by paragraphs 
(1), (2), and (3) of subsection (b). Each pro- 
posed project shall be described in sufficient 
detail to support congressional authoriza- 
tion and solicitation of bids for construction 
of necessary facilities. 

"(2) A list and description of alternative 
project plans under this subsection shall be 












28390 

submitted in President's fiscal year 1991 
budget request. Such plans shall require 
funding or in-kind contributions from pri- 
vate sources in support of up to fifty percen- 
tum of total project costs. 

"(3) In selecting projects under this sub- 
section, the Secretary shall take into ac- 
count the extent to which such projects will 
contribute to earlier commercialization of 
key technologies within such categories 
than might occur without Federal support 
under this subsection and the extent to 
which such projects will contribute to the 
competitiveness of U.S. firms engaged in 
international trade in renewable energy 
technologies. 

"(d) Report on Options.— On or before 
May 1, 1991, the Secretary shall submit to 
Congress a report analyzing options avail- 
able to the Secretary under existing law to 
accelerate the timely commercialization of 
wind, photovoltaic, solar thermal, biofuels, 
biomass, solar buildings, ocean and geother- 
mal renewable energy technologies through 
emphasis on development and demonstra- 
tion assistance to specific technologies in 
the research, development, and demonstra- 
tion programs of the Department of Energy 
that are near commercial application. 

"(e) Amended Goals.— Whenever the Sec- 
retary determines that any of the goals es- 
tablished under this section is no longer ap- 
propriate, he shall notify Congress of the 
reason for the determination and provide an 
amended goal that is consistent with the 
purposes of this title. 

"SEC. 305. ENERGY EFFICIENCY RESEARCH AND 
DEVELOPMENT. 

"(a) New Initiatives.— The President's 
budget request for fiscal years 1991 and 
1992 shall include the Secretary's recom- 
mendations of amounts to be set aside for 
new initiatives in energy efficiency research, 
development, and demonstration. Funds 
made available for new initiatives shall sup- 
plement and not supplant funds available to 
complete on-going energy efficiency re- 
search, development, and demonstration 
projects supported in whole or in part by 
the Secretary during fiscal year 1990. Funds 
made available for new initiatives shall be 
used by the Secretary to support the most 
promising and deserving new ideas in energy 
efficiency research, development, and dem- 
onstration brought to the attention of the 
Secretary during the previous fiscal year. 
"(b) Authorizations.— 
"(1) Fiscal year 1990.— There is hereby 
authorized to be appropriated to the Secre- 
tary for the energy efficiency research, de- 
velopment, and demonstration programs of 
the Secretary, an amount not to exceed 
$176,600,000 in fiscal year 1990, of which 
$20,250,000 shall be available for new initia- 
tives, as set forth below: 

"(A) for transportation energy efficiency 
research, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$58,000,000 of which $3,200,000 shall be 
made available for new initiatives; 

"(B) for industrial energy efficiency re- 
search, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$42,000,000, of which $5,800,000 shall be 
available for new initiatives; 

"(C) for buildings and community systems 
energy efficiency research, development, 
and demonstration, there is authorized to be 
appropriated to the Secretary an amount 
not to exceed $42,000,000, of which 
$9,250,000 shall be available for new initia- 
tives; 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



"(D) for multi-sector energy efficiency re- 
search, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$33,000,000, of which $2,000,000 shall be 
available for new initiatives; and 

"(E) for energy efficiency research, devel- 
opment, and demonstration policy and man- 
agement, there is authorized to be appropri- 
ated to the Secretary an amount not to 
exceed $1,600,000. 

"(2) Fiscal year 1991.— There is hereby 
authorized to be appropriated to the Secre- 
tary for the energy efficiency research, de- 
velopment, and demonstration programs of 
the Secretary, an amount not to exceed 
$192,600,000 in fiscal year 1991, of which 
$6,000,000 shall be available for new initia- 
tives, as set forth below: 

"(A) for transportation energy efficiency 
research, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$63,200,000, of which $2,000,000 shall be 
made available for new initiatives; 

"(B) for industrial energy efficiency re- 
search, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$45,000,000, of which $1,000,000 shall be 
available for new initiatives; 

"(C) for buildings and community systems 
energy efficiency research, development, 
and demonstration, there is authorized to be 
appropriated to the Secretary an amount 
not to exceed $45,000,000, of which 
$2,000,000 shall be available for new initia- 
tives; 

"(D) for multi-sector energy efficiency re- 
search, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$35,700,000, of which $1,000,000 shall be 
available for new initiatives; and 

"(E) for energy efficiency research, devel- 
opment, and demonstration policy and man- 
agement, there is authorized to be appropri- 
ated to the Secretary an amount not to 
exceed $1,700,000. 

"(3) Fiscal year 1992.— There is hereby 
authorized to be appropriated to the Secre- 
tary for the energy efficiency research, de- 
velopment, and demonstration programs of 
the Secretary, an amount not to exceed 
$204,047,000 in fiscal year 1992, of which 
$6,000,000 shall be available for new initia- 
tives, as set forth below: 

"(A) for transportation energy efficiency 
research, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$65,460,000, of which $2,000,000 shall be 
made available for new initiatives; 

"(B) for industrial energy efficiency re- 
search, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$46,740,000, of which $1,000,000 shall be 
available for new initiatives; 

"(C) for buildings and community systems 
energy efficiency research, development, 
and demonstration, there is authorized to be 
appropriated to the Secretary an amount 
not to exceed $53,000,000 of which 
$2,000,000 shall be available for new initia- 
tives; 

"(D) for multi-sector energy efficiency re- 
search, development, and demonstration, 
there is authorized to be appropriated to 
the Secretary an amount not to exceed 
$37,050,000, of which $1,000,000 shall be 
available for new initiatives; and 

"(E) for energy efficiency research, devel- 
opment, and demonstration policy and man- 



agement, there is authorized to be appropri- 
ated to the Secretary an amount not to 
exceed $1,797,000. 

"SEC. 306. JOINT RESEARCH AND DEVELOPMENT 
VENTURES. 

"(a) Findings and Purposes.— 
"(1) Findings.— For purposes of this sec- 
tion. Congress finds that joint research and 
development ventures can— 

"(A) improve coordination in technology 
development among firms in industries at- 
tempting to commercialize renewable 
energy and energy efficiency technologies: 

"(B) assist in setting national standards to 
improve the operation of markets for these 
technologies; and 

"(C) enhance the ability of domestic firms 
to compete with foreign enterprises in sales 
of renewable energy and energy efficiency 
technologies. 

"(2) Purpose.— The purpose of this section 
is to direct the Secretary of Energy to make 
use of joint research and development ven- 
tures to further commercialization of re- 
newable energy and energy efficiency tech- 
nologies. 
"(b) Establishment.— 
"(1) The Secretary shall establish six joint 
research and development ventures in ac- 
cordance with the provisions of this section. 
Each joint research and development ven- 
ture under this section shall include manu- 
facturing firms, investors, an advisory com- 
mittee appointed in accordance with this 
section, and such other participation as the 
Secretary deems appropriate to achieve the 
purposes of this section. Any facilities con- 
structed under this section shall be located 
in the United States, Puerto Rico, the 
Virgin Islands, or the territories and posses- 
sions of the United States. 

"(2) The Secretary shall require that at 
least 30 per centum of all costs of any joint 
research and development venture under 
this section be provided from non-federal 
sources. 

"(3) Before establishing the joint research 
and development ventures under paragraph 
(1), the Secretary shall consult with, and 
take into consideration the recommenda- 
tions of, the Advisory Committee on Renew- 
able Energy and Energy Efficiency Technol- 
ogy under paragraph (4). 

4)(A) The Secretary shall appoint mem- 
bers to an Advisory Committee on Renew- 
able Energy and Energy Efficiency Technol- 
ogy (hereinafter referred to as the 'Advisory 
Committee') to assist the Secretary in carry- 
ing out his responsibilities under this sec- 
tion. The Advisory Committee shall include 
at least one member representing each of 
the following— 
"(i) the Secretary of Commerce; 
"(ii) The Secretary of Housing and Urban 
Development; 
"(iii) the Solar Energy Research Institute; 
"(iv) the Electric Power Research Insti- 
tute; 

"(v) the National Institute of Building Sci- 
ences; 

"(vi) associations of firms in each of the 
major the renewable energy manufacturing 
industries; and 

"(vii) associations of firms in each of the 
major energy efficiency manufacturing in- 
dustries. 

"(B) The Advisory Committee, within 120 
days after its formation, provide the Secre- 
tary with recommendations for the estab- 
lishment of joint ventures under paragraph 
(1) and shall advise the Secretary from time 
to time about the implementation of such 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28391 



ventures. Recommendations of the Advisory 
Committee shall be available to the public. 

"(5) The Secretary shall establish at least 
one joint research and development venture 
in accordance with subsection (c) to develop 
technology and expertise in each of the fol- 
lowing areas— 

"(A) photovoltaics technology; 

"(B) wind energy technology; 

"(C) solar thermal technology; 

"(D) factory-made housing; 

"(E) advanced district cooling technology; 
and 

"(F) renewable energy and energy effi- 
ciency technology exports. 

"(6) Not later than 180 days after the date 
of the enactment of this section the Secre- 
tary shall publish plans to implement this 
section and report to Congress on such 
plans. 

"(C) VENTURES.— 

"(1) Photovoltaics technology.— (A) The 
Secretary shall establish and provide finan- 
cial assistance to a joint research and devel- 
opment venture for the demonstration of 
photovoltaic conversion of solar energy in 
accordance with the provisions of this para- 
graph. 

"(B) The purpose of the venture under 
subparagraph (A) shall be to design, test 
and demonstrate systems employing critical 
enabling technologies for photovoltaic con- 
version of solar energy so as to achieve, to 
the maximum extent practicable, the goals 
of the Photovoltaic Energy Systems Pro- 
gram set forth in section 304(a)(2), as those 
goals may be amended under section 304(e). 
The venture under this paragraph may em- 
phasize production, distribution, storage, or 
end use of electricity from photovoltaic con- 
version of solar energy or any combination 
thereof. 

"(C) In soliciting proposals for the joint 
research and development venture under 
this paragraph, the Secretary shall consider 
the recommendations of the Advisory Sub- 
committee on Photovoltaic Energy Technol- 
ogy under subparagraph (D). 

"(D) The Secretary shall appoint mem- 
bers to an Advisory Subcommittee on Pho- 
tovoltaic Energy Technology to assist the 
Secretary in carrying out his responsibilities 
with respect to the joint venture under this 
paragraph. Such subcommittee shall include 
such members of the Advisory Committee 
as the Secretary deems appropriate and, in 
addition, at least one member representing 
each of the following— 

"(i) firms in the photovoltaic manufactur- 
ing industry; 

"(ii) the Director of the Agency for Inter- 
national Development; and 

"(iii) the Director of the Export-Import 
Bank. 

"(E) There is authorized to be appropri- 
ated to the Secretary a total of not more 
than $1,200,000 for each of the fiscal years 
1990, 1991 and 1992 to carry out the pur- 
poses of this paragraph. 

"(2) Wind Energy Technology.— (A) The 
Secretary shall establish and provide finan- 
cial assistance to a joint research and devel- 
opment venture for the demonstration of 
the conversion of wind energy in accordance 
with the provisions of this paragraph. 

"(B) The purpose of the venture under 
subparagraph (A) shall be to design, test 
and demonstrate systems employing critical 
enabling technologies for the conversion of 
wind energy so as to achieve, to the maxi- 
mum extent practicable, the goals of the 
Wind Energy Research Program set forth in 
section 304(a)(1), as those goals may be 
amended under section 304(e). The venture 



under this paragraph may emphasize pro- 
duction, distribution, storage, or end use of 
wind energy or any combination thereof and 
may include systems employing other 
sources of energy in addition to wind 
energy. 

"(C) In soliciting proposals for the joint 
research and development venture under 
this paragraph, the Secretary shall consider 
the recommendations of the Advisory Sub- 
committee on Wind Energy Technology 
under subparagraph (D). 

"(D) The Secretary shall appoint mem- 
bers to an Advisory Subcommittee on Wind 
Energy Technology to assist the Secretary 
in carrying out his responsibilities with re- 
spect to the joint venture under this para- 
graph. Such subcommittee shall include 
such members of the Advisory Committee 
as the Secretary deems appropriate and, in 
addition, at least one member representing 
each of the following— 

"(i) firms in the wind energy equipment 
manufacturing industry; 

"(ii) the Director of the Agency for Inter- 
national Development; and 

"(iii) the Director of the Export-Import 
Bank. 

"(E) There is authorized to be appropri- 
ated to the Secretary a total of not more 
than $1,200,000 for each of the fiscal years 
1990, 1991 and 1992 to carry out the pur- 
poses of this paragraph. 

"(3) Solar thermal technology.— (A) The 
Secretary shall establish and provide finan- 
cial assistance to a joint research and devel- 
opment venture for the demonstration of 
the use of solar thermal energy in accord- 
ance with the provisions of this paragraph. 

"(B) The purpose of the venture under 
subparagraph (A) shall be to design, test 
and demonstrate critical enabling technol- 
ogies for the use of solar thermal energy so 
as to achieve, to the maximum extent prac- 
ticable, the goals of the Solar Thermal 
Energy Systems Program set forth in sec- 
tion 304(a)(3), as those goals may be amend- 
ed under section 304(e). The venture under 
this paragraph may emphasize production, 
distribution, storage, or end use of solar 
thermal energy or any combination thereof 
and may include systems employing other 
sources of energy in addition to solar ther- 
mal energy. 

"(C) In soliciting proposals for the joint 
research and development venture under 
this paragraph, the Secretary shall consider 
the recommendations of the Advisory Sub- 
committee on Solar Thermal Energy Tech- 
nology under subparagraph (D). 

"(D) The Secretary shall appoint mem- 
bers to an Advisory Subcommittee on Wind 
Energy Technology to assist the Secretary 
in carrying out his responsibilities with re- 
spect to the joint venture under this para- 
graph. Such subcommittee shall include 
such members of the Advisory Committee 
as the Secretary deems appropriate and, in 
addition, at least one member representing 
each of the following— 

"(i) firms in the solar thermal manufac- 
turing industry; 

"(ii) the Director of the Agency for Inter- 
national Development; 

"(iii) the Director of the Export-Import 
Bank; and 
"(iv) the Gas Research Institute. 
"(E) There is authorized to be appropri- 
ated to the Secretary a total of not more 
than $900,000 for each of the fiscal years 
1990 through 1992 to carry out the purposes 
of this paragraph. 

"(4) Factory-made housing.— The Secre- 
tary shall establish and provide financial as- 



sistance to a joint research and development 
venture with such specialized private firms 
and investors as the Secretary deems appro- 
priate in order to establish at least three re- 
gional projects to demonstrate techniques 
to improve the energy performance of facto- 
ry-made housing offered by United States 
firms. In locating the projects under this 
paragraph, the Secretary shall consider re- 
gional differences in housing needs, housing 
design, construction technique, marketing 
practices, and construction materials. 

"(C) The projects under this paragraph 
shall be designed to demonstrate state-of- 
the-art product quality, energy efficiency, 
and adaptability to renewable forms of 
energy of factory-made housing offered for 
sale in the United States. The projects shall 
be structured to demonstrate improvements 
in housing design, fabrication, delivery sys- 
tems, construction processes, marketing, 
and product export techniques. 

"(D) The demonstration strategy under 
this paragraph shall be guided by— 

"(i) a detailed characterization of the 
needs of the home building industry; 

"(ii) a close working relationship with all 
sectors of the home building industry; and 

"(iii) coordination among the projects to 
pool and conserve resources. 

"(E) In selecting projects under this sec- 
tion, the Secretary shall consider the recom- 
mendations of the Advisory Subcommittee 
on Energy Performance in Factory-Made 
Housing established under subparagraph 
(F). 

"(F) The Secretary shall appoint members 
to an Advisory Subcommittee on Energy 
Performance in Factory-Made Housing to 
assist the Secretary in carrying out his re- 
sponsibilities with respect to the joint re- 
search and development venture established 
under this paragraph. Such subcommittee 
shall include such members of the Advisory 
Committee as the Secretary deems appro- 
priate and, in addition, at least one member 
representing each of the following— 

"(i) the National Association of Home 
Builders; 

"(ii) the National Laboratories of the De- 
partment of Energy; and 
"(iii) the National Bureau of Standards. 
"(G) There is authorized to be appropri- 
ated to the Secretary a total of not more 
than $10,000,000 for each of the fiscal years 
1990 through 1992 to carry out the purposes 
of this paragraph. 

"(5) Advanced district cooling technolo- 
gy.— (A )(i) The Secretary shall establish and 
provide financial assistance to a joint re- 
search and development venture with such 
specialized private firms and investors as 
the Secretary deems appropriate in order to 
develop advanced district cooling technol- 
ogies that are applicable in cities with high 
cooling loads. 

"(ii) The purpose of the joint venture 
under this paragraph is to develop technical 
strategies for decreasing the capital cost 
and increasing the energy efficiency of 
major district heating and cooling system 
components and to assist in making district 
heating and cooling available to local gov- 
ernments. 

"(B) The Secretary shall select three cities 
for application of advance district cooling 
technologies developed by the joint venture 
under this paragraph. The activities to be 
carried out in such application shall include 
district cooling assessment, feasibility, and 
engineering design studies. 

"(C) In selecting the cities under subpara- 
graph (B), the Secretary shall consider the 
recommendations of the Advisory Subcom- 



!! 






I 



28392 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



mittee on Advanced District Cooling Tech- 
nology established under subparagraph (D). 
"(D) The Secretary shall appoint mem- 
bers to an Advisory Subcommittee on Ad- 
vanced District Cooling Technology to assist 
the Secretary in carrying out his responsi- 
bilities with respect to the joint research 
and development venture under this para- 
graph. Such subcommittee shall include 
such members of the Advisory Committee 
as the Secretary deems appropriate and, in 
addition, at least one member representing 
each of the following— 

"(i) firms manufacturing district cooling 
equipment; and 
"(ii) the National League of Cities. 
"(E) There is authorized to be appropri- 
ated for each of the fiscal years 1990 
through 1992 not more than $1,000,000 per 
year to carry out the purposes of this para- 
graph. 

"(6) Export technology projects.— (A) 
for purposes of this paragraph Congress 
finds that— 

"(i) the United States has several ad- 
vanced energy efficiency and renewable 
energy technologies that lack only suffi- 
cient coordination, support, and emphasis to 
become important export items capable or 
reducing the United States' trade deficit; 

"(ii) a major barrier to export of energy 
efficiency and renewable energy technology 
is the lack of information on overseas mar- 
kets and technology development by foreign 
competitors; 

"(iii) the industry that markets energy ef- 
ficiency technology is highly fragmented, 
and the renewable energy industry is com- 
prised of small firms that lack the necessary 
resources to identify and target overseas 
markets and; 

"(iv) a joint research and development 
venture is needed to bring together a broad 
array of manufacturing firms, financial in- 
stitutions, and Federal agencies to identify 
and develop promising technologies and 
export markets for energy efficiency and re- 
newable energy technologies. 

"(B) The Secretary shall establish and 
provide financial assistance to a joint re- 
search and development venture with such 
specialized private firms and investors as 
the Secretary determines appropriate for 
the purpose of improving energy efficiency 
and renewable energy manufacturing proc- 
esses in order to enhance product reliability 
and cost competitiveness relative to foreign- 
made products. The joint venture under this 
paragraph shall be coordinated with re- 
search, assessment, and targeting of foreign 
markets for energy efficiency and renewable 
energy products. 

"(C) In designing the joint venture under 
subparagraph (B), the Secretary shall con- 
sider the recommendations of the Advisory 
Subcommittee on Renewable Energy and 
Energy Efficiency Technology Exports es- 
tablished under subparagraph (D). 

"(D) The Secretary shall appoint mem- 
bers to an Advisory Subcommittee on Re- 
newable Energy and Energy Efficiency 
Technology Exports to assist the Secretary 
in carrying out his responsibilities with re- 
spect to the joint research and development 
venture under this paragraph. Such sub- 
committee shall include such members of 
the Advisory Committee as the Secretary 
deems appropriate and, in addition, at least 
one member representing each of the fol- 
lowing— 

"(i) the Director of the Agency for Inter- 
national Development; 

"(ii) the Director of the Export-Import 
Bank; 



"(iii) the United States Export Council for 
Renewable Energy; 

"(iv) the National Laboratories of the De- 
partment of Energy. 

"(E) There is authorized to be appropri- 
ated to the Secretary to carry out the pur- 
poses of this paragraph a total amount for 
each of the fiscal years 1990 through 1992 
not to exceed $5,000,000 with respect to re- 
newable energy activities under this para- 
graph and $5,000,000 with respect to energy 
efficiency activities under this paragraph. 

"SEC. 307. RENEWABLE ENERGY EXPORTS. 

"(a) Findings and Purpose.— (1) For pur- 
poses of this section, Congress finds that— 

"(A) Among the major problems in pro- 
moting exports of renewable energy tech- 
nology are the lack of available information 
on overseas markets and the absence of fi- 
nancing for the purchase of the technol- 
ogies; and 

"(B) the Committee on Renewable 
Energy, Commerce, and Trade CCORECT') 
established under the Renewable Energy In- 
dustry Development Act (Public Law 98- 
370) currently coordinates Federal govern- 
ment activities to promote renewable energy 
exports. 

"(2) The purpose of this section is to 
evaluate current efforts to promote exports 
of renewable energy technology, to estab- 
lish a joint government-industry plan to 
identify promising technologies and in- 
crease the financing available for exports of 
renewable energy technologies, to target po- 
tential markets for these technologies, and 
to authorize funding of these activities. 

"(b) Review of CORECT.— In order to 
provide reliable information on overseas 
markets for renewable energy technology, 
the Secretary shall review the activities of 
the Committee on Renewable Energy, Com- 
merce, and Trade in order to determine if 
current efforts by such Committee to pro- 
mote exports of renewable energy technolo- 
gy are sufficient and whether additional ef- 
forts are necessary. The Secretary shall 
report to Congress the results of such 
review within six months after the date of 
the enactment of this Act. 

"(c) Report.— Each participating member 
of the Committee on Renewable Energy, 
Commerce, and Trade shall report annually 
to Congress on the actions of such agency 
during the previous fiscal year to achieve 
the purposes of the Committee on Renew- 
able Energy, Commerce, and Trade and of 
this section. Such report shall describe the 
exports of renewable energy technology 
that have occurred as a result of such 
agency actions. 

"(d) Plan.— The Committee on Renewable 
Energy, Commerce, and Trade shall— 

"(1) establish a joint government-industry 
plan to maintain or increase the market 
share of the United States in international 
trade in renewable energy technologies, in- 
cluding technologies for production of alco- 
hol fuels, biomass energy, geothermal 
energy, wood energy and in technologies for 
passive solar energy conversion, photovol- 
taics, solar thermal energy conversion and 
wind energy conversion. Such plan shall in- 
clude guidelines for agencies that are mem- 
bers of the Committee with respect to the 
financing of exports of such renewable 
energy technologies; 

"(2) develop, in consultation with repre- 
sentatives of affected industries, administra- 
tive guidelines for Federal export loan pro- 
grams to simplify application by firms seek- 
ing export assistance for renewable energy 
technologies from agencies implementing 
such programs; and 



"(3) target renewable energy technology 
markets for primary emphasis by Federal 
export loan programs, development pro- 
grams, and private sector assistance pro- 
grams. 

"(e) Authorizations.— There is hereby au- 
thorized to be appropriated to the Secretary 
for activities of the Committee on Renew- 
able Energy, Commerce, and Trade an 
amount not to exceed— 

"(1) $1,500,000 in fiscal year 1990; 

"(2) $2,200,000 in fiscal year 1991; and 

"(3) $2,500,000 in fiscal year 1992. 

"SEC. 308. RENEWABLE ENERGY. 

"(a) Dissemination of Information.— Sec- 
tion 523 of the National Energy Conserva- 
tion Policy Act (42 U.S.C. 8243) is amended 
by adding a new subsection (d) as follows: 

"(d) In order to more widely disseminate 
information about the program under this 
part and under part 3 and the benefits of 
solar heating and solar heating and cooling 
technology, the Secretary shall establish a 
program to disseminate such information 
for Federal procurement officers and Feder- 
al loan officers that shall include site visits 
and technical briefings. The Secretary shall 
utilize available funds for the program 
under this subsection. 

"(b) Department of Defense Housing.— 
Section 2857(b)(1) of title 10, United States 
Code, is amended by inserting after 'has the 
potential for' for following: 'reduced energy 
costs'. 

"(c) Overseas Private Investment Corpo- 
ration Loans— Section 234(e) of The For- 
eign Assistance Act of 1961 is amended— 

"(1) in the first sentence, by inserting 
after 'cooperatives' the following: 'and in- 
cluding the initiation of incentives, grants, 
and studies for renewable energy and other 
small business activities'; and 

"(2) by adding at the end thereof the fol- 
lowing new sentence: 'Administrative funds 
may not be made available for incentives, 
grants, and studies for renewable energy 
and other small business activities.' 

"SEC. 309. REPORTS. 

"(a) Report by the Secretary.— One year 
after the date of the enactment of this title 
and annually thereafter, the Secretary shall 
report to Congress on the programs, 
projects, and joint research and develop- 
ment ventures conducted under this title 
and the progress being made towards ac- 
complishing the goals and purposes set 
forth in this title, including the national 
goals set forth in section 304(a). 

"(b) National Energy Policy Plan 
Report.— Each annual submission of the 
National Energy Policy Plan under title 
VIII of Public Law 95-91 shall be accompa- 
nied by a three-year strategic plan for 
energy technology research, development, 
and demonstration. Such plan shall address 
the role of federally assisted research, devel- 
opment, and demonstration in the achieve- 
ment of the national policy goals of the Na- 
tional Energy Policy Plan and shall assess 
both the level of support for energy re- 
search, development, and demonstration 
reasonably necessary to achieve these goals 
and the basis for allocating the support rec- 
ommended by the President among the 
available alternatives. At a minimum, these 
alternatives shall include energy efficiency 
and renewable energy technologies. 

"Title IV— Manuel Lujan, Jr. Neutron 
Scattering Center 

"SEC. 410. RENAMING FACILITY. 

"The Los Alamos Neutron Scattering 
Center is hereby redesignated as the 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28393 



'Manuel Lujan, Jr. Neutron Scattering 
Center.' 

"SEC. 411. REFERENCES. 

"Any reference in any law, regulation, 
map, record, or other document of the 
United States to the Los Alamos Neutron 
Scattering Center shall be considered a ref- 
erence to the Manuel Lunan, Jr. Neutron 
Scattering Center'.". 
2. Amend the title so as to read as follows: 
"A bill to establish a national Federal pro- 
gram effort in close collaboration with the 
private sector to develop as rapidly as possi- 
ble the applications of superconductivity to 
enhance the Nation's economic competitive- 
ness and strategic well being, to better inte- 
grate universities and private industry into 
the National Laboratory system of the De- 
partment of Energy so as to speed the devel- 
opment of technology in areas of significant 
economic potential, to provide Federal as- 
sistance and leadership to a program of re- 
search, development, and demonstration of 
renewable energy and energy efficiency 
technologies, and for other purposes.". 



NATIONAL AIDS AWARENESS 
AND PREVENTION MONTH 



HATCH AMENDMENT NO. 3424 

Mr. WILSON (for Mr. Hatch) pro- 
posed an amendment to the joint reso- 
lution (S.J. Res. 192) to designate the 
month of October 1987, as "National 
AIDS Awareness and Prevention 
Month"; as follows: 

On page 2, line 3, strike out "1987" and 
insert in lieu thereof "1988". 

Amend the title to read as follows: "To 
designate the month of October 1988, as 
"National AIDS Awareness and Prevention 
Month". 



ARMSTRONG AMENDMENT NO. 
3425 

Mr. WILSON (for Mr. Armstrong) 
proposed an amendment to the joint 
resolution, Senate Joint Resolution, 
192, supra; as follows: 

At the appropriate place add the follow- 
ing: 

Section . The National Mining Hall of 
Fame and Museum, organized and incorpo- 
rated under the laws of Colorado, is hereby 
recognized as such and is granted a charter. 

POWERS 

Sec . The National Mining Hall of Fame 
and Museum (hereafter in this Act referred 
to as the "corporation"), shall have only 
those powers granted to it through its 
bylaws and articles of incorporation filed in 
the State or States in which it is incorporat- 
ed and subject to the laws of such State or 
States. 

OBJECTS AND PURPOSES OF CORPORATION 

Sec. . The objects and purposes of the 
corporation are those provided in its articles 
of incorporation including— 

(1) to honor citizens, mining leaders, 
miners, prospectors, teachers, scientists, en- 
gineers, inventors, governmental leaders, 
and other individuals, who have helped to 
make this Nation great by their outstanding 
contributions to the establishment, develop- 
ment, advancement, or improvement of 
mining in the United States of America; 

(2) to perpetuate the memory of such indi- 
viduals and record their contributions and 



achievements by the erection and mainte- 
nance of such buildings, monuments, and 
edifices as may be deemed appropriate as a 
lasting memorial; 

(3) to foster, promote, and encourage a 
better understanding of the origins and 
growth of mining, especially in the United 
States, and the part mining has played in 
changing the economic, social, and scientific 
aspects of our Nation; 

(4) to establish and maintain a library and 
museum for collecting and preserving for 
posterity, the history of those honored by 
the corporation, together with a documenta- 
tion of their accomplishments and contribu- 
tions to mining, including such items as 
mining pictures, paintings, books, papers, 
documents, scientific data, relics, mementos, 
artifacts, and things relating to such items; 

(5) to cooperate with other mining organi- 
zations which are actively engaged and in- 
terested in similar projects; and 

(6) to engage in any and all activities inci- 
dental thereto or necessary, suitable, or 
proper for the accomplishment of any of 
the purposes set forth in this section. 

membership 
Sec. . Eligibility for membership in the 
corporation and the rights and privileges of 
members shall be as provided in the bylaws 
of the corporation. 

BOARD OF DIRECTORS; COMPOSITION; 
RESPONSIBILITIES 

Sec. . The board of directors of the cor- 
poration and the responsibilities thereof 
shall be as is provided in the articles of in- 
corporation of the corporation and in con- 
formity with the laws of the State or States 
in which it is incorporated. 

OFFICERS OF CORPORATION 

Sec . The officers of the corporation, 
and the election of such officers shall be as 
is provided in the articles of incorporation 
of the corporation and in conformity with 
the laws of the State or States wherein it is 
incorporated. 

RESTRICTIONS 

Sec . (a) No part of the income or assets 
of the corporation shall inure to any 
member, officer, or director of the corpora- 
tion or be distributed to any such person 
during the life of this charter. Nothing in 
this subsection shall be construed to pre- 
vent the payment of reasonable compensa- 
tion to the officers of the corporation or re- 
imbursement for actual necessary expenses 
in amounts approved by the board of direc- 
tors. 

(b) The corporation shall not make any 
loan to any officer, director, or employee of 
the corporation. 

(c) The corporation and any officer and 
director of the corporation, acting as such 
officer or director, shall not contribute to, 
support, or otherwise participate in any po- 
litical activity or in any manner attempt to 
influence legislation. 

(d) The corporation shall have no power 
to issue any shares of stock nor to declare or 
pay any dividends. 

(e) The corporation shall not claim con- 
gressional approval or Federal Government 
authority for any of its activities. 

(f ) The corporation shall retain and main- 
tain its status as a corporation organized 
and incorporated under the laws of the 
State of Colorado. 

LIABILITY 

Sec . The corporation shall be liable for 
the acts of its officers and agents when 
acting within the scope of their authority. 



SERVICE OF PROCESS 

Sec . With respect to service of process, 
the corporation shall comply with the laws 
of the States in which it is incorporated and 
those States in which it carries on its activi- 
ties in furtherance of its corporate pur- 
poses. 

books and records; inspection 

Sec . The corporation shall keep correct 
and complete books and records of account 
and shall keep minutes of any proceeding of 
the corporation involving any of its mem- 
bers, the board of directors, or any commit- 
tee having authority under the board of di- 
rectors. The corporation shall keep at its 
principal office a record of the names and 
addresses of all members having the right to 
vote. All books and records of such corpora- 
tion may be inspected by any member 
having the right to vote, or by any agent or 
attorney of such member, for any proper 
purpose, at any reasonable time. Nothing in 
this section shall be construed to contravene 
any applicable State law. 

AUDIT OF FINANCIAL TRANSACTIONS 

Sec . The first section of the Act enti- 
tled "An Act to provide for audit of ac- 
counts of private corporations established 
under Federal law", approved August 30, 
1964 (36 U.S.C. 1101), is amended by adding 
at the end thereof the following: 

"(60) The National Mining Hall of Fame 
and Museum". 

ANNUAL REPORT 

Sec . The corporation shall report annu- 
ally to the Congress concerning the activi- 
ties of the corporation during the preceding 
fiscal year. Such annual report shall be sub- 
mitted at the same time as is the report of 
the audit required by section 11 of this Act. 
The report shall not be printed as a public 
document. 

RESERVATION OF RIGHT TO AMEND OR REPEAL 
CHARTER 

Sec . The right to alter, amend, or 
repeal this Act is expressly reserved to the 
Congress. 

DEFINITION OF "STATE" 

Sec . For purposes of this Act, the term 
"State" includes the District of Columbia, 
the Commonwealth of Puerto Rico, and the 
territories and possessions of the United 
States. 

TAX-EXEMPT STATUS 

Sec . The corporation shall maintain its 
status as an organization exempt from tax- 
ation as provided in the Internal Revenue 
Code of 1954. 

TERMINATION 

Sec . If the corporation fails to comply 
with any of the restrictions or other provi- 
sions of this Act, the charter granted by this 
Act shall expire. 



IMPORTED VEHICLE SAFETY 
COMPLIANCE ACT 



INOUYE AMENDMENT NO. 3426 
Mr. BYRD (for Mr. Inouye and Mr. 
Rudman) proposed an amendment to 
the bill (H.R. 2628) to amend the Na- 
tional Traffic and Motor Vehicle 
Safety Act of 1966 respecting the im- 
portation of motor vehicles in antici- 
pation of compliance with safety 
standards under such act; as follows: 



28394 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



On the first page, line 5, strike out "1987" 
and insert "1988". 

On page 3, beginning with line 15, strike 
out all through line 20 and insert in lieu 
thereof the following: 

"(i)(I) the motor vehicle is determined to 
be substantially similar to a motor vehicle 
originally manufactured for importation 
into and sale in the United States, certified 
under section 114, and of the same model 
year (as defined by regulation by the Secre- 
tary) as the model of the motor vehicle to 
be compared, and is capable of being readily 
modified to conform to all applicable Feder- 
al motor vehicle safety standards; or 

"(II) where there is no substantially simi- 
lar United States motor vehicle, the Secre- 
tary determines that the safety features of 
the vehicle comply with or are capable of 
being modified to comply with all applicable 
Federal motor vehicle safety standards 
based on destructive test data or such other 
evidence as the Secretary determines to be 

On page 3, line 22, strike out "(F)" and 
insert in lieu thereof "(D)". 

On page 4, line 16, strike out "(G)" and 
insert in lieu thereof "(E)". 

On page 4, beginning with line 22, strike 
out all through line 14 on page 6 and insert 
in lieu thereof the following: 

"(C)(i) The Secretary shall make the de- 
termination under paragraph (3)(A)(i)— 

"(I) on the petition of any registered im- 
porter or any manufacturer, or 
"(II) on the Secretary's own initiative, 
"(ii) The Secretary shall establish by regu- 
lation (I) the information required to be 
provided by the petitioner to clearly show 
that the vehicle is capable of being brought 
into compliance with all applicable Federal 
motor vehicle safety standards and (II) the 
procedures for considering such petitions. 
In establishing such procedures, the". 

On page 6, line 23, strike out "regarding 
the similarity of motor vehicles". 

On page 6, line 24, strike out "those" and 

insert in lieu thereof "the same model of". 

On page 7, line 1, strike out "cles until the 

end of 12" and insert in lieu thereof "cle 

until the end of 3". 

On page 7, line 4, strike out "of motor ve- 
hicle similarity". 

On page 7, line 7, immediately before the 
period insert the following: "consistent with 
ensuring expeditious, but full, consideration 
and avoiding delay by any person". 

On page 7, line 12, strike out "regarding 
the similarity of motor vehicles". 

On page 7, line 13, strike out "those motor 
vehicles" and insert in lieu thereof "the 
same model of motor vehicle". 

On page 7, line 14, strike out "12" and 
insert in lieu thereof "3". 

On page 7, line 19, strike out "motor vehi- 
cles" and insert in lieu thereof "same model 
of motor vehicle". 

On page 7, line 20, immediately after the 
period, add the following: "A positive deter- 
mination shall be sufficient authority for 
any other registered importer to import a 
vehicle of the same model under this subsec- 
tion provided such registered importer com- 
plies with all the terms and conditions of 
such determination.". 

On page 7, line 21, strike out "(F)" and 
insert in lieu thereof "(D)". 

On page 8, line 22, strike out "(G)" and 
insert in lieu thereof "(E)". 

On page 8, line 23, strike out "(G)" and 
insert in lieu thereof "(E)". 
On page 10, line 4, strike out "concealed". 
On page 10, line 9, strike out "concealed". 
On page 12, line 3, strike out "(G)" and 
insert in lieu thereof "(E)". 



On page 13, line 16, strike out "1987" and 
insert "1988". 

On page 15, line 8, strike out "1987" and 
insert "1988". 

On page 15, line 15, strike out "1987" and 
insert "1988". 

On page 17, line 18, beginning with "(b)", 
strike out all through the quotation marks 
on line 19 and insert in lieu thereof "(b) of". 

On page 18, line 6, strike out "(F)" and 
insert in lieu thereof "(D)". 

On page 18, line 12, strike out "(E)" and 
insert in lieu thereof "(C)". 



PARENTAL AND MEDICAL LEAVE 
ACT 



DOLE AMENDMENTS NOS. 3427- 
3428 

(Ordered to lie on the table.) 
Mr. DOLE submitted two amend- 
ments intended to be proposed by him 
to the bill (S. 2488) to grant employees 
parental and temporary medical leave 
under certain circumstances, and for 
other purposes; as follows: 

AMENDMENT NO. 34 2 7 

At the appropriate place add the follow- 
ing: 

None of the provisions of this Act shall 
become effective until the following is en- 
acted: 

SECTION 1. SHORT TITLE AND TABLE OF CON- 
TENTS. 

(a) Short Title— This Act may be cited 
as the "Omnibus Drug Initiative Act of 
1988". 

(b) Table of Contents.— 

TABLE OF CONTENTS 

Title I— Committee on Banking, Finance 
and Urban Affairs 

Title II— Committee on Education and 
Labor 

Title III— Committee on Foreign Affairs 

Title IV— Committee on Government Oper- 
ations 

Title V— Committee on Interior and Insular 
Affairs 

Title VI— Committee on the Judiciary 

Title VII— Committee on Merchant Marine 
and Fisheries 

Title VIII— Committee on Public Works and 
Transportation 

Title IX— Committee on Ways and Means 

Title X— Committee on Energy and Com- 
merce 

Title XI— Information on Illegal Foreign 
Drug Activities 

Title XII— Organization 

TITLE I— COMMITTEE ON BANKING, 

FINANCE AND URBAN AFFAIRS 
Subtitle A— Money Laundering Control 

SECTION 1001. SHORT TITLE. 

This subtitle may be cited as the "Money 
Laundering Control Amendments of 1988". 

SEC 1002. IDENTIFICATION REQUIRED TO PUR- 
CHASE CERTAIN MONETARY INSTRU- 
MENTS OF $3,000 OR MORE. 

(a) In General.— Subchapter II of chapter 
53 of title 31, United States Code, is amend- 
ed by adding at the end thereof the follow- 
ing new section: 

"§5325. Identification required to purchase cer- 
tain monetary instruments 
"(a) In General.— No financial institution 
may issue or sell a bank check, cashier's 
check, traveler's check, or money order to 
any individual in connection with a transac- 



tion which involves United States coins or 
currency (or such other monetary instru- 
ments as the Secretary may prescribe) in 
amounts or denominations of $3,000 or more 
unless — 

"(1) the individual has an account with 
such financial institution and the financial 
institution— 

"(A) verifies that fact through a signature 
card or other information maintained by 
such institution in connection with the ac- 
count of such individual; and 

"(B) records the method of verification in 
accordance with regulations which the Sec- 
retary of the Treasury shall prescribe; or 

"(2) the individual furnishes the financial 
institution with such forms of identification 
as the Secretary of the Treasury may re- 
quire in regulations which the Secretary 
shall prescribe and the financial institution 
verifies and records such information in ac- 
cordance with regulations which such Secre- 
tary shall prescribe. 

"(b) Report to Secretary Upon Re- 
quest.— Any information required to be re- 
corded by any financial institution under 
paragraph (1) or (2) of subsection (a) shall 
be reported by such institution to the Secre- 
tary of the Treasury at the request of such 
Secretary.". 

(b) Clerical Amendment.— The table of 
sections for chapter 53 of title 31, United 
States Code, is amended by adding at the 
end thereof the following new item: 

"5325. Identification required to purchase 
certain monetary instru- 
ments.". 

SEC. 1003. MONETARY TRANSACTION RECORDKEEP- 
ING AND REPORTING REQUIREMENTS 
FOR TARGETED INSTITUTIONS. 

(a) Secretary Authorized to Require 
Recordkeeping for Domestic Coin and 
Currency Transactions.— Subchapter II of 
chapter 53 of title 31, United States Code, is 
amended by inserting after section 5325 (as 
added by section 2(a) of this Act) the follow- 
ing new section: 

"§ 5326. Records of certain domestic coin and 
currency transactions 

"Under such circumstances as the Secre- 
tary of the Treasury may prescribe by regu- 
lation, the Secretary may issue an order re- 
quiring any domestic financial institution— 
"(1) to obtain such information as the Sec- 
retary may describe in such order concern- 
ing— 

"(A) any transaction in which such finan- 
cial institution is involved for the payment, 
receipt, or transfer of United States coins or 
currency (or such other monetary instru- 
ments as the Secretary may describe in such 
order) the total amounts or denominations 
of which are equal to or greater than an 
amount which the Secretary may prescribe; 
and 

"(B) any other person participating in 
such transaction; 

"(2) to maintain a record of such informa- 
tion for such period of time as the Secretary 
may require; and 

"(3) to file a report with respect to any 
transaction described in paragraph (1)(A) in 
the manner and to the extent specified in 
the order.". 

(b) Clerical Amendment.— The table of 
sections for chapter 53 of title 31, United 
States Code, is amended by inserting after 
the item relating to section 5325 (as added 
by section 2(b) of this Act) the following 
new item: 

"5326. Records of certain domestic coin and 
currency transactions.". 



October 5, 1988 



CONGRESSIONAL RECORD— SENATE 



28395 



SEC. 1004. FINANCIAL RECORDS OF INSIDERS. 

Section 1113 of the Right to Financial Pri- 
vacy Act of 1978 (12 U.S.C. 3413) is amended 
by adding at the end thereof the following 
new subsection: 

"(1) Crimes Against Financial Institu- 
tions by Insiders.— Nothing in this title 
shall apply when any financial institution 
or supervisory agency provides any financial 
record of any officer, director, employee, or 
controlling shareholder (within the mean- 
ing of subparagraph (A) or (B) of section 
2(a)(2) of the Bank Holding Company Act 
of 1956 or subparagraph (A) or (B) of sec- 
tion 408(a)(2) of the National Housing Act) 
of such institution, or of any major borrow- 
er from such institution who there is reason 
to believe may be acting in concert with any 
such officer, director, employee, or control- 
ling shareholder, to the Attorney General 
of the United States, to a State law enforce- 
ment agency, or, in the case of a possible 
violation of subchapter II of chapter 53 of 
title 31. United States Code, to the Secre- 
tary of the Treasury if there is reason to be- 
lieve that such record is relevant to a possi- 
ble violation by such person of— 

"(1) any law relating to crimes against fi- 
nancial institutions or supervisory agencies 
by directors, officers, employees, or control- 
ling shareholders of, or by borrowers from, 
financial institutions; or 

"(2) any provision of subchapter II of 
chapter 53 of title 31, United States Code.". 

SEC. 1005. DELEGATION OF ENFORCEMENT POWER 
TO POSTAL SERVICE. 

Section 5318(a)(1) of title 31, United 
States Code, is amended by inserting "and 
the Postal Service" after "appropriate su- 
pervising agency". 

SEC. 1006. PENALTIES FOR FAILURE TO COMPLY 
WITH CERTAIN RECORDKEEPING RE- 
QUIREMENTS. 

(a) Insured Banks.— Section 21 of the 
Federal Deposit Insurance Act (12 U.S.C. 
1829b) is amended by adding at the end 
thereof the following new subsection: 

"(j) Civil Penalties.— 

"(1) Penalty imposed.— Any insured bank 
and any director, officer, or employee of an 
insured bank who willfully violates any reg- 
ulation prescribed under this section shall 
be liable to the United States for a civil pen- 
alty of not more than $10,000. 

"(2) Treatment of continuing viola- 
tion.— A separate violation of any regula- 
tion prescribed under subsection (b) of this 
section occurs for each day the violation 
continues and at each office, branch, or 
place of business at which such violation 
occurs. 

"(3) Assessment.— Any penalty imposed 
under paragraph (1) shall be assessed, miti- 
gated, and collected in the manner provided 
in subsections (b) and (c) of section 5321 of 
title 31, United States Code.". 

(b) Insured Institutions.— Section 411 of 
the National Housing Act (12 U.S.C. 1730d) 
is amended— 

(1) by striking out "The Secretary" and 
inserting in lieu thereof "(a) Regulations.— 
The Secretary"; and 

(2) by adding at the end thereof the fol- 
lowing new subsection: 

"(b) Civil Penalties.— 

"(1) Penalty imposed.— Any insured insti- 
tution and any director, officer, or employee 
of an insured institution who willfully vio- 
lates any regulation prescribed under sub- 
section (a) of this section shall be liable to 
the United States for a civil penalty of not 
more than $10,000. 

"(2) Treatment of continuing viola- 
tion.— A separate violation of any regula- 



tion prescribed under subsection (a) of this 
section occurs for each day the violation 
continues and at each office, branch, or 
place of business at which such violation 
occurs. 

"(3) Assessment.— Any penalty imposed 
under paragraph (1) shall be assessed, miti- 
gated, and collected in the manner provided 
in subsections (b) and (c) of section 5321 of 
title 31. United States Code.". 

(c) Other Financial Institutions.— 

(1) Institutions subject to recordkeep- 
ing requirement.— Section 123(b) of Public 
Law 91-508 (12 U.S.C. 1953(b)) is amended 
to read as follows: 

"(b) Institutions Subject to Recordkeep- 
ing Requirements.— The authority of the 
Secretary of the Treasury under subsection 
(a) extends to any financial institution (as 
defined in section 5312(a)(2) of title 31, 
United States Code), other than an insured 
bank (as defined in section 3(h) of the Fed- 
eral Deposit Insurance Act) and any insured 
institution (as defined in section 401(a) of 
the National Housing Act), and any partner, 
officer, director, or employee of any such fi- 
nancial institution.". 

(2) Increase in amount of civil penal- 
ties.— Section 125(a) of Public Law 91-508 
(12 U.S.C. 1955(a)) is amended by striking 
out "$1,000" and inserting in lieu thereof 
"$10,000". 

SEC. 1007. GOOD FAITH AS A DEFENSE FROM LI- 
ABILITY FOR DISCLOSURE OF FINAN- 
CIAL RECORDS OF INSIDERS. 

Section 1117(c) of the Right to Financial 
Privacy Act of 1978 (12 U.S.C. 3417(c)) is 
amended— 

(1) by inserting "or pursuant to the provi- 
sions of section 1113(1)" after "certificate by 
any Government authority"; and 

(2) by inserting before the period at the 
end thereof the following: "under this title, 
the constitution of any State, or any law or 
regulation of any State or any political sub- 
division of any State". 

SEC. 1008. TECHNICAL CORRECTIONS. 

(a) Subparagraphs (T) and (U) of section 
5312(a)(2) of title 31, United States Code, 
are amended to read as follows: 

"(T) any agency of the United States, or 
of any State or political subdivision of any 
State, which engages in any activity in 
which any business described in this para- 
graph is authorized to engage, including the 
United States Postal Service; and 

"(U) any business or agency which en- 
gages in any activity which the Secretary of 
the Treasury determines, by regulation, to 
be an activity which is similar to, related to, 
or a substitute for any activity in which any 
business described in this paragraph is au- 
thorized to engage.". 

(b) Section 5312(a)(5) of title 31, United 
States Code, is amended— 

(1) by inserting a comma after "Puerto 
Rico"; and 

(2) by striking the second comma after 
"Pacific Islands". 

(c) The first sentence of section 5321(a)(1) 
of title 31, United States Code, is amended 
by inserting "(if any)" after "transaction". 

SEC. 1009. STUDY OF WITHDRAWAL OF LEGAL 
TENDER STATUS OF $100 FEDERAL RE- 
SERVE NOTES. 

(a) Study Required— The Secretary of 
the Treasury, in consultation with appropri- 
ate law enforcement agencies, shall conduct 
a study of the feasibility of withdrawing the 
legal tender status of $100 Federal Reserve 
notes. 

(b) Factors To Be Considered.— The 
study conducted pursuant to subsection (a) 



by the Secretary of the Treasury shall in- 
clude an analysis of the following factors: 

(1) Whether $100 Federal Reserve notes 
are being used predominately for illegal ac- 
tivities, especially drug-related transactions. 

(2) Whether withdrawing the legal tender 
status of $100 Federal Reserve notes would 
help deter such illegal activities. 

(3) Whether withdrawing the legal tender 
status of $100 Federal Reserve notes would 
impair legitimate business transactions. 

(4) Whether withdrawing the legal tender 
status of $50 Federal Reserve notes (in addi- 
tion to the $100 notes) would result in even 
greater deterrence of illegal activities. 

(c) Report Required.— Before the end of 
the 180-day period beginning on the date of 
the enactment of this Act, the Secretary of 
the Treasury shall submit a report to the 
Congress on the study conducted pursuant 
to subsection (a). 

SEC. 1010. TRANSFER BY GOVERNMENT AGENCY OF 
RECORDS TO THE DEPARTMENT OF 
JUSTICE FOR CRIMINAL INVESTIGA- 
TION. 

Section 1112 of the Right to Financial Pri- 
vacy Act of 1978 (12 U.S.C. 3412) is amended 
by adding at the end thereof the following 
new subsection: 

"(f) Nothing in this title shall apply when 
financial records obtained by an agency or 
department of the United States are dis- 
closed or transferred to the Attorney Gener- 
al upon the certification by a supervisory 
level official of the transferring agency or 
department that there is reason to believe 
that the records may be relevant to a viola- 
tion of Federal criminal law. Records so 
transferred shall be used only for criminal 
investigative or prosecutive purposes by the 
Department of Justice and shall, upon com- 
pletion of the investigation or prosecution 
(including any appeal), be returned only to 
the transferring agency or department.". 

SEC. 1011. AMENDMENT TO THE PRESENTATION OF 
RECORDS REQUIREMENT. 

Section 1120(1) of the Right to Financial 
Privacy Act of 1978 (12 U.S.C. 3420(D) is 
amended by inserting before the semicolon 
at the end the following: "unless the volume 
of such records makes such return and 
actual presentation impractical in which 
case the grand jury shall be provided with a 
description of the contents of the records". 

Subtitle B— International Provisions 

SEC. 1021. EXPORT-IMPORT BANK FINANCING FOR 
SALES OF DEFENSE ARTICLES AND 
SERVICES FOR ANTI-NARCOTICS PUR- 
POSES. 

Section 2(b)(6) of the Export-Import Bank 
Act of 1945 (12 U.S.C. 635(b)(6)) is amend- 
ed- 

(1) by inserting "(A)" before "The Bank"; 

(2) by striking "paragraph" and inserting 
in lieu thereof "subparagraph"; and 

(3) by adding at the end the following new 
subparagraphs: 

"(B) Subparagraph (A), and section 32 of 
the Arms Export Control Act, shall not 
apply to any sale of defense articles or serv- 
ices if — 

"(i) the Bank is requested to provide a 
guarantee or insurance for the sale; 

"(ii) the President determines, in accord- 
ance with subparagraph (C), that the sale is 
in the national interest of the United 
States; 

"(iii) the Bank determines that, notwith- 
standing the provision of a guarantee or in- 
surance for the sale, not more than 10 per- 
cent of the guarantee and insurance author- 
ity available to the Bank in any fiscal year 









I:: 



28396 



CONGRESSIONAL RECORD— SENATE 



October 5, 1988 



will be used by the Bank to support the sale 
of defense articles and services; and 

"(iv) the sale is made on or before Septem- 
ber 30, 1992. 

"(C) In determining whether a sale of de- 
fense articles or services would be in the na- 
tional interest of the United States, the 
President shall take into account whether 
the sale would— 

"(i) be consistent with the anti-narcotics 
policy of the United States; 

"(ii) involve the end use of a defense arti- 
cle or service in a major illicit drug produc- 
ing or major drug- transit country (as de- 
fined in section 481(i) of the Foreign Assist- 
ance Act of 1961); and 

"(hi) be made to a country with a demo- 
cratic form of government. 

"(D) The Board shall not give approval to 
guarantee or insure a sale of defense articles 
or services unless the President determines, 
in accordance with subparagraph (C), that 
it is in the national interest of the United 
States for the Bank to provide such guaran- 
tee or insurance, and such determination 
has been reported to the Congress not less 
than 25 days of continuous session of the 
Congress before the date of such approval. 
For purposes of the preceding sentence, con- 
tinuity of a session of the Congress shall be 
considered as broken only by an adjourn- 
ment of the Congress sine die, and the days 
on which either House is not in session be- 
cause of an adjournment of more than 3 
days to a day certain shall be excluded in 
the computation of the 25-day period re- 
ferred to in such sentence. 

"(E) The provision of a guarantee or in- 
surance under subparagraph (B) shall be 
deemed to be the provision of security as- 
sistance for purposes of section 502B of the 
Foreign Assistance Act of 1961 (relating to 
governments which engage in a consistent 
pattern of gross violations of international 
recognized human rights). 

"(F) To the extent that defense articles or 
services for which a guarantee or insurance 
is provided under subparagraph (B) are used 
for a purpose other than anti-narcotics pur- 
poses, they may be used only for those pur- 
poses for which defense articles and defense 
services sold under the Arms Export Con- 
trol Act (relating to the foreign military 
sales program) may be used under section 4 
of such Act. 

"(G) As used in this paragraph, the term 
'defense articles and services' means arti- 
cles, services, and related technical data 
that are designated as defense articles and 
defense services pursuant to sections 38 and 
47(7) of the Arms Export Control Act and 
listed on the United States Munitions List 
(part 121 of title 22 of the Code of Federal 
Regulations).". 

SEC. 1022. LOAN PROGRAMS TO REDUCE ECONOMIC 
DEPENDENCE ON ILLICIT NARCOTICS. 

The International Financial Institutions 
Act (22 U.S.C. 262 et seq.) is amended by re- 
designating section 1606 as section 1607 and 
by inserting after section 1605 the foll